KOMMUNINVEST ANNUAL REPORT 2024 1
2024
Annual Report
KOMMUNINVEST I SVERIGE AB
INTRODUCTION
Kommuninvest in brief
3
President’s statement 6
Our mission 8
Operational development 9
Local government loan financing 10
Customer case 11
Liquidity management 13
Organisation and employees 14
SUSTAINABILITY REPORT
Sustainability report 17
Environmental and climate work 20
Social sustainability 22
Governance and responsible business 23
Sustainability indicators 25
Auditor’s opinion 27
BOARD OF DIRECTORS’ REPORT
Lending 29
Funding 31
Financial position 32
Proposed distribution of earnings 33
Risk and capital management 34
Corporate governance report 39
FINANCIAL STATEMENTS
Table of contents, financial statements and notes 48
Income statement and Statement of comprehensive income 49
Balance sheet 51
Statement of changes in equity 53
Cash flow statement 55
Notes 56
Five-year summary 93
Alternative performance measurements 94
Signatures 95
Audit Report 96
Table of contents
The Annual Report for Kommuninvest i Sverige AB (publ) 556281-4409 comprises the Board of Directors’ Report
and the financial statements, including the appurtenant notes. The Annual Report is presented on pages 29-95
of this document.
The official 2024 Annual Report has been prepared in Swedish in the ESEF electronic reporting format and can
be accessed from kommuninvest.se. The Annual Report is also published as English and Swedish PDFs. All
versions were submitted for publication on 12 February 2025.
While every care has been taken in translating of this report, readers are reminded that the original report,
signed by the Board of Directors and the CEO, is in Swedish.
KOMMUNINVEST ANNUAL REPORT 2024 3
Working together for better terms
Kommuninvest’s role entails offering secure and cost-effective financing to
its members and customers – Swedish municipalities, regions, municipal
companies and other local government actors.
281+15
KOMMUNINVEST IS OWNED BY 281 MUNICIPALITIES
AND 15 REGIONS
SEK
545.2
bn
ON 31 DECEMBER 2024 LENDING TO
CUSTOMERS AMOUNTED TO SEK 545.2 BILLION.
CSI 86.3
This year’s customer survey showed an
increase in the Customer Satisfaction Index
(CSI), which reached 86.3 (85.9) in the latest
survey. The main reason why customers
recommend Kommuninvest is the high level
of service.
Basic concept
Together, municipalities and regions can
borrow more securely and inexpensively
than each of them could individually.
Together, the local government sector
can also increase its expertise in financial
management.
Since 1986
Since its inception in 1986, Kommuninvest
has helped reduce the Swedish local
government sector’s funding expenses by
many billions of kronor. Ultimately this has
benefited citizens who have had access to
improved public services at both the local
and regional levels.
Organisation with clear
division of roles
Kommuninvest comprises two parts:
The Kommuninvest Cooperative Society
(the Society) and the credit market company
Kommuninvest i Sverige AB (the Company).
Kommuninvest Cooperative Society
Administers membership and the joint and
several guarantee and is responsible for
capital acquisition.
The Board of Directors consists of elected
politicians from municipalities and regions.
Kommuninvest i Sverige AB
Conducts the financial operations, including
funding, lending and liquidity management.
The Board of Directors consists of individuals
with expertise in areas such as public
administration, capital markets and business
development.
Green Loans
Green Loans were
introduced in 2015 for
financing environmental
and climate-related
investments. Since the
launch, the volume of
disbursed Green Loans
has grown to
SEK 91.6 billion.
Social
Sustainability
Loans
Social Sustainability
Loans to finance socially
sustainable investments
were introduced in 2021.
Since the launch, the
volume of disbursed Social
Sustainability Loans has
grown to SEK 4.6 billion.
AAA/Aaa
KOMMUNINVEST HAS THE HIGHEST POSSIBLE
CREDIT RATING, AAA/Aaa, AND A STABLE OUTLOOK.
KOMMUNINVEST IN BRIEF | WORKING TOGETHER FOR BETTER TERMS
KOMMUNINVEST ANNUAL REPORT 2024 4
CONTINUED LENDING GROWTH
Kommuninvest’s lending grew to SEK 545.2 (511.9) billion
in 2024. That gave a growth rate of 6.5 (6.1) percent.
Kommuninvest’s market share was 58 percent at the end of
2023 and is deemed to have decreased slightly over the year.
At the same time, the number of borrowers increased and, at
the end of 2024, Kommuninvest had a total 1,041 (1,027) active
borrowers.
Lending for sustainable projects increased in 2024. At the end
of 2024, 710 projects had been approved, corresponding to
SEK 126.5 (111.8) billion in Green Loans, of which SEK 91.6 (79.4)
had been disbursed. The proportion of Green Loans in relation
to Kommuninvest’s total lending amounted to 17 (16) percent.
Social Sustainability Loans showed strong growth due to larger
applications in terms of volume. By the end of the year, SEK
10.9 (6.7) billion in Social Loans had been granted, distributed
between 27 (20) different projects and 20 (16) members. The
volume of Social Sustainability Loans disbursed amounted to
SEK 4.6 (2.1) billion.
STABLE FUNDING OPERATIONS
Funding functioned well over the year. Low credit risk in
the lending portfolio, combined with the joint and several
guarantee from the members, make Kommuninvest a safe
investment option for investors. At the end of the year,
funding totalled SEK 589.4 (550.7) billion in nominal terms.
As planned, the Company continued to issue Green Bonds,
which are mainly acquired by investors seeking to support
environmentally oriented investments. Over the year,
Kommuninvest was able to finance customers’ borrowing
needs on favourable terms, despite sometimes challenging
market conditions.
KNOWLEDGE AND RESEARCH
Over the year, four research reports and two focus reports
were published. The two focus reports generated interest
among stakeholders, the media, customers and members.
One of the focus reports is titled “Samhällsfastigheter – vem
hyr vad ifrån vem?” (Community properties – who rents
what from whom?) and the other is titled “Dyrare droppar
– ökad skuldsättning och stigande räntor för kommunala
VA-verksamheter” (More expensive drops – increased debt
and rising interest rates for municipal water and sewerage
operations). In October, we also published our annual “Local
Government Debt Report”. This showed that the local
government sector’s borrowing is rising at a higher rate
compared with the past two years. In 2023, local government
sector borrowing increased by just under SEK 58 billion, or
7.1 percent, to SEK 877 billion.
MAJOR PROGRESS IN SUSTAINABILITY
The Company’s climate work builds on the climate plan
that was set out in 2022. Over the year, work intensified on,
for example, the Company’s strategy and business Plan, EU
directives regarding sustainability reporting (CSRD/ESRS),
as well as increased demands for credit institutes to take
sustainability factors into account in their lending.
A base year value for the Company’s financed greenhouse
gas emissions was calculated over 2024. The base year
value provides a starting position in terms of the scope of the
greenhouse gas emissions to which the Company contributes
through its operations, primarily through its lending. This served
as the starting point for the reduction plan adopted during
the year that manifests the Company’s ambition to be able to
achieve the target of climate neutrality (net zero), from 2022
annual emission levels, by 2045, including interim targets for
2030.
Furthermore, as part of preparations for sustainability reporting
in accordance with CSRD/ESRS, an initial assessment was
conducted regarding a double materiality analysis.
MANY SATISFIED CUSTOMERS
The annual customer survey, updated in May 2024, reflected
a stable trend and very high level of loyalty. The reason for
customers wanting to recommend the Company is the high
service level and satisfaction with the reception received.
Customers having participated in the Company’s courses,
events, webinars or having attended a counselling meeting
indicate an even higher degree of loyalty than those who
have not participated. Of the total number of respondents, 87
percent also consider the Company to have accommodating
loan processes. The Customer Satisfaction Index (CSI) rose
since the preceding survey and is now at CSI 86.3 (85.9).
NEW STRATEGY DEVELOPED
During the past year, the Company adopted a new long-term
strategy for 2025–2027. The strategy entails an increased
focus on customers, competitiveness, quality, efficiency
and continuing to be an attractive employer. In parallel with
this work, the Board of Directors of the Society, the Board of
Directors of the Company and the Executive Management
Team presented proposals for an updated vision, operational
concept and business concept. As a consequence of this work,
a proposal was developed regarding new owner directives.
Proposals regarding new owner directives, a new vision and
a new operational concept will be presented for adoption in
connection with the Annual General Meeting of the Society in
Stockholm on 3 April 2025.
Stable loan trend and progress
in sustainability
Over the past year, the world’s financial markets stabilised compared with recent years and
we have witnessed lower interest rates as a consequence of central banks seeing inflation
more in line with their targets. Market conditions have, however, continued to be pervaded
by the uncertainty in the external environment.
KOMMUNINVEST IN BRIEF | SIGNIFICANT EVENTS DURING THE YEAR
KOMMUNINVEST ANNUAL REPORT 2024 5
KOMMUNINVEST IN BRIEF | MULTI-YEAR SUMMARY
MULTI-YEAR SUMMARY, KOMMUNINVEST I SVERIGE AB
2024 2023 2022 2021 2020
Balance sheet total, SEK, billion 613.3 568.9 553.3 524.3 527.4
Lending (recognised value), SEK, billion 544.4 508.8 470.7 460.7 445.8
Net profit, SEK, million 505.1 355.2 -42.1 375.6 179.7
Members, total 296 295 294 294 262
of which, municipalities 281 280 280 280 278
of which, regions 15 15 14 14 14
Core Tier I capital ratio, % 337.9 354.9 454.1 397.1 302.5
Tier I capital ratio, % 337.9 354.9 454.1 397.1 302.5
Total capital ratio, % 337.9 354.9 454.1 397.1 302.5
Leverage ratio, % 18.03 20.17 14.23 15.36 10.6
Swedish Benchmark
Programme
54 (55) %
Benchmark funding,
other currencies
24 (26) %
BORROWING PORTFOLIO
BY PROGRAMME
4
MARKET SHARE,
LOCAL GOVERNMENT LOAN FINANCING
1
Funding via
Kommuninvest
58 (59) %
Bank funding
13 (12) %
Funding through
proprietary funding
programmes 29 (29) %
Municipalities
3
48 (46) %
Municipal housing
companies 23 (25) %
Other
municipal/
regional
companies
21 (21) %
Municipal
energy
companies
5 (5) %
Regions
3 (3) %
LENDING PORTFOLIO
BY BORROWER CATEGORY
2
1) Outcome as of 31 December 2023 (within parenthesis as of 31 December 2022). In previous interim
and annual reports, forecast figures have been reported for the same date, which have, to some
extent, deviated from this outcome.
The diagram refers to 31 December 2024. Figures in parentheses refer
to 31 December 2023.
3) Some lending to municipalities is on-lent to municipal companies
through municipal internal banks.
Green Bonds 13 (14) %
Private placement 1 (1) %
ECP, Euro-Commercial Paper
Programme 9 (4) %
4) The diagram refers to 31 December 2024. Figures in parentheses refer to
31 December 2023.
PRESIDENT’S STATEMENT
“Our business
model has held
strong over the
past year. We are an
established long-
term bond issuer
in both Swedish
and foreign capital
markets, backed by
strong owners.”
Katarina Ljungqvist
President, Kommuninvest
KOMMUNINVEST ANNUAL REPORT 2024 7
PRESIDENT’S STATEMENT
OTHER INVESTMENT NEEDS THAN PREVIOUSLY
In 2024, we witnessed a certain shift in the character of
investment needs. Strongly curtailed population projections
entail decreased needs for investment in schools and
preschools. Instead, we are seeing needs for investment in, and
maintenance of, water and sewerage, properties, infrastructure,
energy efficiency and climate adjustment measures.
Our latest Local Government Debt Report, published in October
2024, shows local government borrowing rose by 7.1 percent
in 2023. The municipalities’ debt is increasing in relation to that
of the central government – a trend deemed have continued
in 2024. The demographic trend entails a relatively small
number of municipalities continuing to grow, primarily within
metropolitan regions and in those places where major industrial
investments are planned. A large number of municipalities will
likely need to plan for a declining population.
STABLE BUSINESS DEVELOPMENT
Our business model has held strong over the past year. We
are an established long-term bond issuer in both Swedish
and foreign capital markets, backed by strong owners. This
allows us to ensure highly favourable capacity for lending to
our customers even in times of uncertainty. Over the year, we
continued to maintain a high preparedness to manage security
and continuity and, in 2024, we strengthened our capacity to
reveal and address cyberattacks.
Our lending volume increased by 6.5 percent over the year,
amounting to SEK 545.2 billion on 31 December 2024. Over the
year, our funding rose to SEK 589.4 billion.
During the year, we also had the pleasure of being able
to welcome the Municipality of Nacka as new member of
Kommuninvest.
WORK TO STRENGTHEN KOMMUNINVEST FOR THE FUTURE
In 2024, a number of initiatives were implemented to further
strengthen and develop the Company. During the spring, we
conducted a reorganisation aimed partly at streamlining the
work of the Company’s first and second lines of defence, and
partly at improving the conditions for an efficient process.
At the Annual General Meeting of the Society in March 2024,
minor changes in the Owner Directive were adopted, enabling
certain changes in the credit decision process. Application of
the updated model commenced as early as in June, meaning,
for example, that decisions within the process are based to
a greater extent on a forward-looking analysis of customers’
investment plans and financial position.
Over the year, we have also implemented a major overhaul of
the Company’s strategic governance. This occurred in parallel
with a corresponding process within the Kommuninvest
Cooperative Society (the Society). Updated proposals regarding
vision, business concept and owner directives are to be
presented for adoption at the Annual General Meeting of the
Society on 3 April 2025. These efforts have been aimed at
clarifying our role, ambitions and competitiveness looking
ahead.
GROWTH IN OUR SUSTAINABLE LOAN PRODUCTS
We witnessed promising development among our sustainable
loan products in 2024. We currently have more than 700
sustainable loan projects that can be financed through either
Green Loans or Social Sustainability Loans. In June 2024, our
new framework for Green Bonds was published, in which
updated terms for Green Loans began being applied as of
December 2024.
Lending within our social loan programmes also increased
over the year and we are happy to say that key investments in
this area are now also financed through Social Sustainability
Loans to an increasing extent. Applications for which financing
was approved during the year included investments in living
environments in Ale, Sollentuna and Örebro, school upgrades
in Linköping, a cultural centre in Gävle, an aquatic centre in
Partille and development of an athletics and recreational area
in Landskrona. In the late autumn, growth over the year meant
that we could announce our intention to issue our first social
bond at some point in the first half of 2025.
NET PROFIT
We delivered a positive operating profit for 2024, despite
the continued strong negative impact of the risk tax. Positive
unrealised market value changes partly offset the negative
effect. In our assessment, the risk tax will impact earnings for
2025 with full effect, while the proposed basic deduction will
entail some relief in 2026. We consider this just one step along
the road and we will continue to strive for the complete removal
of this tax burden.
A troubled external environment, increased
investment needs and efforts to strengthen
Kommuninvest for the future
During 2024, we experienced increased external destabilisation. We are witnessing
various kinds of cyberattacks, challenging many operations to a varying extent. Security
and contingency issues have attracted increased focus, also affecting investment among
municipalities and regions. Higher expenses in the wake of inflation remain a challenge and
we are seeing substantial investment needs in water and sewerage, and energy efficiency,
for example. At Kommuninvest, we have, over the year, completed extensive internal efforts
to safeguard continued robust operations.
Kommuninvest i Sverige AB
Katarina Ljungqvist
President and CEO
KOMMUNINVEST ANNUAL REPORT 2024 8KOMMUNINVEST ANNUAL REPORT 2024 8
OUR MISSION
Our mission
LENDING FOR INVESTMENT
Kommuninvest lends money to
the local government sector in
Sweden. When a municipality
or region has decided to make
an investment and assessed
its borrowing needs, a loan
application is prepared. If an
investment project contributes
to a favourable impact on
sustainability, a Green Loan or
Social Sustainability Loan may be
relevant.
KNOWLEDGE CENTRE FOR THE LOCAL
GOVERNMENT SECTOR
As a credit market company with
only municipalities, regions and their
companies as customers, we are
uniquely experienced in financing
the Swedish local government
sector. We are engaged in advisory
services, education, research
and coordination in financial
management issues.
Dialogue
with financial
advisers on loan
application and
the opportunity
to borrow
sustainably.
Disbursement
of loans.
Advisory service.
KI Finans.
Ongoing debt
management
with KI Finans.
1 2 3
4
5
Loans are
approved.
KOMMUNINVEST ANNUAL REPORT 2024 9
OPERATIONAL DEVELOPMENT
Kommuninvest has grown in recent years and faces increased
demands from members, customers, investors and public
authorities. Our work processes and systems support were
originally designed for smaller operations and we now therefore
need to modernise and develop our business process,
including systems support and its support processes. Efficient
data management is decisive for decision-making and business
development. We are endeavouring to improve our capacity,
both in terms of accessing data and managing it efficiently.
At a time in which the area of sustainability is developing rapidly
and new regulatory requirements are coming into effect, we
face increased regulatory and reporting requirements. The
Company is now expected to take responsibility for the entire
value chain in which it operates, entailing increased demands
for clear feedback to investors regarding how loaned funds
are used. Although we strive to build long-term cost-efficient
operations, the operational development we face in the
upcoming years also requires considerable investment.
OPERATIONAL DEVELOPMENT HIGHLIGHTS IN 2024
• The credit process was adapted to enhance efficiency and
create a transparent process for customers.
• A double materiality analysis was conducted, in line
with CSRD, to prioritise areas of importance for how
the organisation generates value and for stakeholder
expectations.
• The adaptation of the green framework to the taxonomy
with the launch with updated loan criteria and increased
disclosure requirements to ensure compliance and to meet
the financial market’s transparency requirements.
• The procurement of a new treasury system was completed,
with implementation beginning to strengthen financial
processes and risk control.
• The procurement of a new lending system is in progress,
aimed at enhancing efficiency and future-proofing the
processes.
• An enterprise resource planning (ERP) system with
streamlined processes was implemented, reducing
operational risks and laying the foundation for future
development.
• A new data warehouse is being prepared, offering reliable
data and opportunities to generate official reports as of
31 December.
Focus on sustainability and efficiency to meet
future demands
Over the year, several initiatives were implemented to develop our operations, to
future-proof our business systems and to adapt them to new regulatory requirements
in sustainability. The purpose is to strengthen our capacity to meet current and future
external demands, while also reducing operational risks.
KOMMUNINVEST ANNUAL REPORT 2024 10
LOCAL GOVERNMENT LOAN FINANCING
Population growth in the 2010s, entailing a million additional
citizens over ten years, drove up needs for new housing and
expanded welfare infrastructure. In the 2020s, the focus of
investment has shifted more towards renovating and replacing
existing infrastructure. The large number of properties,
homes, and water and sewage systems built in the record
years between 1960 and 1975 are approaching the end of
their technical lifespan and require renovation. The transition
to a sustainable society will also require extensive future
investment.
The combination of higher investment volumes and lower
net profit has resulted in a lower self-financing rate among
investments in the local government sector in 2023, compared
with the pandemic years. According to preliminary figures, this
trend looks like persisting in 2024. Accordingly, borrowing by
the local government sector has increased in the past two years
and the growth rate is now deemed to be at the same level
as the average for the 2010s.The local government sector’s
economy is expected to improve in the upcoming years and the
sector’s borrowing is expected to grow at a lower rate than in
the 2010s.
Kommuninvest grew strongly after the financial crisis of 2007–
2008 and has since then continued to increase its market
share. Between 2017 and 2023, the market share rose from
50 to 58 percent, while financing through the banking sector
and bilateral agreements decreased from 17 to 13 percent
of borrowing. Today, slightly more than 20 municipalities,
regions and a small number of municipal companies borrow
directly from the capital market. In 2023, municipal bond and
commercial paper issues accounted for 29 percent of the
sector’s total financing.
Local government sector borrowing needs
Following several years with lower investment levels due to the corona pandemic,
investment volumes increased in 2023. At the end of the year, needs for loan financing
also increased. Local government debt grew by 7 percent to SEK 877 (819) billion, with
Kommuninvest financing 58 (59) percent of the local government sector’s total borrowing at
the end of 2023.
THE LOCAL GOVERNMENT SECTOR’S FINANCING FORMS
2013–2023
Kommuninvest Other financing Market programmes
KOMMUNINVEST ANNUAL REPORT 2024 11KOMMUNINVEST ANNUAL REPORT 2024 11
CUSTOMER CASE | CITY OF LANDSKRONA
The SEK 1.2 billion loan finances the development of a modern
sports and recreational area, including an ice rink, an aquatic
centre, a football stadium, sports halls, the Karlslundsparken
park and a piazza between the arenas. This initiative is a
direct measure to meet the health challenges identified in
the political focus document Vägval 2020 (Roadmap 2020).
Roadmap 2020 was adopted by Landskrona municipal council
in November 2020 and includes the priority areas: sustainable
welfare, growth, security, climate and public health.
“We hope that more residents of Landskrona will get exercising,
that club activities will increase, attracting new groups
and increasing integration. By developing our sports and
recreational area, we seek to help improve physical fitness in
the long term”, says Samuel Sköld, Chief Accountant for the City
of Landskrona and project manager for the development of the
Karlslund sports and recreational area in the City of Landskrona.
With this project, we seek to build a platform for physical and
community activities, targeted specifically towards those over
65 and young people of 11 to 17.
The City of Landskrona has been granted
Social Sustainability Loan to develop the
Karlslund sports and recreational area
IMPACT ASSESSMENT PROGRAMME
Borrowers whose applications have been granted Social Sustainability
Loans are expected to submit an annual follow-up on the investment
and the social results of the initiative. The purpose is to follow up the
change achieved among the target group following the implementation
of the investment and the social initiative. This is documented in an
“impact assessment programme”.
The intention is for the financing of Landskrona’s Karlslund initiative to
be followed up using indicators including reduced ill health rates, the
proportion of adults in Landskrona performing moderate intensity, pulse-
raising activities, the proportion of children in Landskrona getting at
least 60 minutes of physical activity a day, as well as the frequency with
which those aged 7 to 20 attend sports clubs. Factors including visitor
numbers and job opportunities in Karlslund, as well as how many people
move into and out of the area will also be followed up.
The City of Landskrona is strengthening its efforts to enhance social sustainability. With its
initiative in the Karlslund sports and recreational area, the municipality seeks to create a
location for increased physical activity and social gatherings. The City of Landskrona was
granted a Social Sustainability Loan from Kommuninvest in the autumn of 2024.
KOMMUNINVEST ANNUAL REPORT 2024 12KOMMUNINVEST ANNUAL REPORT 2024 12
CUSTOMER CASE | MUNICIPALITY OF TANUM
One of the projects included installing heat pumps, replacing
an air treatment unit, improving insulation and mounting solar
panels and batteries to reduce dependency on fossil energy
sources and improve sustainability in the municipality’s overall
energy supply.
“To further reduce the need of purchased electricity within
the municipality, we also installed solar panels and battery
systems, making it possible to produce our own electricity
and store this for later use”, says Liselotte Frojd, Chairman of
the Tanum Municipal Council.
NEW CONSTRUCTION AND REMODELLING OF TWO SCHOOLS
The two other projects involve new construction and
remodelling of the Hamburgsundskolan and Tanumskolan
schools. The Hamburgsundskolan school is expected to be
completed in early 2027 – now even more modern and with
a strong environmental profile. The project focuses clearly
on sustainability and energy efficiency. Recycled materials
and green concrete will be used to reduce the school’s
environmental footprint. The old oil-fired boiler has already
been replaced with an energy-efficient heat pump system and
solar panels are being installed to generate renewable energy.
The municipality is also investing in a sustainable extension to
the Tanumskolan school, which will be better designed to meet
current energy efficiency requirements. The new extension will
offer an inspiring and healthy environment. The school building
will be heated with district heating. Solar panels on the roof will
help reduce the school’s energy needs and climate impact.
The building is clad in wood, both inside and outside, and has
a bright, open interior. The choice of wood as the dominant
material represents an important part of the municipality’s
sustainability initiative.
“By focusing on sustainability, energy efficiency and a secure
and creative school environment, we seek to produce
sustainable, as well as modern and inspiring spaces at both
the Tanumskolan school and the Hamburgsundskolan
school, for students and staff alike”, says Kenneth Eriksson of
the Municipality of Tanum’s Property Department.
Three Green Loans to the Municipality
of Tanum for energy and environmental
improvements
The Municipality of Tanum has improved the sustainability of the municipality’s energy
supply. In the spring of 2024, the municipality was granted three Green Loans for a total SEK
278 million to finance three projects focusing on environmental improvements in connection
with the new construction and remodelling of municipal properties.
Liselotte Fröjd, Council Chairman in the Municipality of Tanum
Hamburgssundskolan school in the Municipality of Tanum. Photo: Lucas Sköld,
Municipality of Tanum
KOMMUNINVEST ANNUAL REPORT 2024 13
LIQUIDITY MANAGEMENT
RESERVE WITH HIGH CREDIT QUALITY AND LOW RISK
Kommuninvest maintains a liquidity reserve, the purpose of
which is to safeguard payment and lending commitments
during periods of high financial stress. The scale of the liquidity
reserve is adapted according to upcoming funding maturities,
for example, and external factors, such as exchange and
interest rate fluctuations. In accordance with the strategy, the
liquidity reserve shall be invested short-term, with the average
maturity not exceeding 12 months. Individual investments may
have a maturity of 39 months at most. Accordingly, the liquidity
reserve is designed to ensure preparedness under turbulent
market conditions.
ASSET MANAGEMENT
In 2024, asset management activities were characterised
by a liquidity reserve comprising highly tradable assets of
superior credit quality. Direct investments are made mainly in
securities issued by sovereigns or central banks, multilateral
development banks and subsidised lenders
1
. At the end of
2024, 90 (92) percent of the reserve was invested in securities
with the highest possible creditworthiness. Of the reserve, 65
(72) percent consisted of investments in securities from issuers
in Sweden.
See Note 3 for further information on the Company’s credit risk
exposure.
1)
Subsidised lenders refers to issuers of securities where exposures are treated
as exposures to the national government in accordance with the CRR regulations.
Among others, these include the Company’s sister organisations in the other Nordic
countries.
Liquidity reserve to meet customer needs
under all circumstances
LIQUIDITY RESERVE DISTRIBUTED BY COUNTRY
31 Dec 2024 (31 Dec 2023)
LIQUIDITY RESERVE DISTRIBUTED BY RATING
CATEGORY
31 Dec 2024 (31 Dec 2023)
LIQUIDITY RESERVE DISTRIBUTED BY ISSUER
CATEGORY
31 Dec 2024 (31 Dec 2023)
Sweden 65 (72) %
Supranationals 15 (6) %
Germany 12 (17) %
Belgium 3 (-) %
Finland 2 (3) %
Denmark 2 (1) %
UK 1 (1) %
AAA 90 (92) %
AA 9 (7) %
A 1 (1) %
National governments or central banks 71 (78) %
Credit institutions (subsidised lenders) 13 (16) %
Multilateral development banks 9 (5) %
International organisations 6 (-) %
Credit institutions (bank balances) 1 (1) %
To ensure that our commitments towards customers and investors can be met, even in
periods of stress in the financial markets, Kommuninvest maintains a liquidity reserve.
This reserve consists of short-term liquid investments with high credit ratings. The reserve
amounted to SEK 57.2 (44.3) billion at the end of the year.
INVESTMENT RULES FOR THE LIQUIDITY
RESERVE
The liquidity reserve may have a
maximum average maturity of 12
months
• The maximum maturity of
individual investments is 39
months.
For further information, see the
Risk and capital management
section or visit Kommuninvest’s
website, www.kommuninvest.se.
KOMMUNINVEST ANNUAL REPORT 2024 14
ORGANISATION AND EMPLOYEES
Kommuninvest has continued to prioritise transparency,
clarity and communication to strengthen the stability of the
organisation and to generate conditions for solid participation
and influence. We implemented a reorganisation over the
year, with purpose of meeting the increased requirements and
safeguarding a long-term sustainable trend.
REORGANISATION PER 1 APRIL 2024
On 1 April, we conducted a reorganisation with the objective of
strengthening our capacity to meet customers’ and members’
needs, as well as addressing an increasingly complex and
challenging external environment through a clear division of
responsibilities. The reorganisation is a strategic initiative aimed
at:
• Strengthening customer focus with a new Loans and Advice
department, responsible for offering sustainable and cost-
effective products, services and credit checks.
• Safeguarding effective financial administration focusing
on funding, liquidity management, investor relations and
procurement of capital to meet customers’ future borrowing
needs.
• Integrating first-line risk management directly into the
operations, clarifying the operational responsibility for risk
management in each business area. This also provides
clarity in the division of responsibilities between the first and
second lines of defence.
• Supporting the “Future-proof operations” programme,
entailing extensive changes and streamlining of systems –
the objective being to complete this successfully and cost-
effectively in 2027 at the latest.
• Improving decision-making skills and developmental
efficiency by establishing a new IT and development
department focusing on technology, operations
management and security issues.
With a modern and sustainable organisation, we are laying
a solid foundation enabling us to face the challenges and
opportunities of the future.
STRATEGIC COMPETENCE SUPPLY
The year has been pervaded both by extensive realignment
and by purposeful development. The implemented
reorganisation has strengthened our capacity to meet future
requirements by focusing on key areas, such as sustainability,
information security and digitisation. To meet increasing
external expectations, we have continued to work strategically
with skills development and staffing.
Under the “Future-proof operations” programme, we have,
over the year, reinforced our organisation with contracted
technology and project management expertise, through both
temporary appointments and external consultants. This has
generated the prerequisites for conducting key projects and
strengthening our delivery capacity.
Change in times of external challenge
In 2024, Kommuninvest continued to navigate a world pervaded by uncertainty and
rapid change. The war in Europe, rising interest rates, inflation and increasing regulatory
requirements affected the organisation and our employees alike. In times of high volatility,
combining security and stability with flexibility and compliance is crucial.
KOMMUNINVEST ANNUAL REPORT 2024 15
ORGANISATION AND EMPLOYEES
WORKING ENVIRONMENT
Physical
Socio-organisational
Digital
ORGANISATION
Leadership
Employee collaboration
Internal communications
EMPLOYEES
Health
Skills development
Benefits
EMPLOYEE SURVEY
ESI (Employee Satisfaction Index)
LEI (Loyalty Employee Index)
eNPS (Employee Net Promoter Score)
We have also initiated training efforts in areas including
financial analysis, sustainability, AI applications and
cybersecurity. These efforts are part of a multi-year initiative to
ensure that our employees have the knowledge and expertise
necessary to meet both current challenges and future
possibilities.
With these strategic measures, we continue to develop an
organisation that is both flexible and robust, equipped to
meet a changing environment with superior aptitude and
professionalism.
EMPLOYEE SURVEY 2024
The 2024 employee survey confirms continued high levels of
engagement and satisfaction among employees. The results
show that our efforts to strengthen the employee experience
continue to generate positive effects:
• ESI (Employee Satisfaction Index): 74 (75)
• ELI (Employee Loyalty Index): 82 (82)
• eNPS (Employee Net Promoter Score): 55 (54)
At 90 (91) percent, the proportion of satisfied and loyal
employees remained stable at high levels. Commitment to the
organisation’s objectives has also been reinforced.
It is particularly gratifying to see that the extensive process
implemented to clarify the Company’s strategy, overarching
objectives, business plans and employee roles and authorities
has brought clarity and satisfaction. The connection between
the Company’s targets and employees’ individual targets is
perceived as stronger, facilitating both motivation and focus at
work.
These successes are the result of focused efforts to build a
sustained well-functioning and clearly controlled organisation
in which all employees feel involved and understand their
contribution to the whole.
LOOKING AHEAD
Kommuninvest faces an exciting future in which we balance
regulatory requirements and customer benefit with internal
efficiency and robustness. With a strengthened organisation,
well-implemented development projects and focusing on
strategic skills development, we are well-equipped to continue
delivering sustainable and value-generating solutions for our
customers and members.
2024 2023 2022 2021 2020
Sustainability
Report
The Sustainability Report, including the indicators
presented on pages 25–26 has been prepared
for the Kommuninvest Group, which includes the
Kommuninvest Cooperative Society and its subsidiary
Kommuninvest i Sverige AB.
KOMMUNINVEST ANNUAL REPORT 2024 17
SUSTAINABILITY REPORT
Sustainability Report
Our view on sustainability builds on the Swedish local
government sector’s mission and we address issues in
accordance with the applicable parts of current legislation,
consistent with international guidelines, including the UN
Global Compact, the UN 2030 Agenda for Sustainable
Development, as well as the OECD Guidelines for Multinational
Enterprises.
TOWARDS MORE COMPLETE INTEGRATION OF SUSTAINABILITY
It is becoming increasingly clear that the financial market can
influence the transition to more sustainable societies. The
EU’s action plan for financing sustainable growth is being
implemented at a high rate in regulations that have begun
being implemented by those affected. The action plan aims
to direct capital towards sustainable investments, to manage
financial risks caused by climate change, environmental
degradation and social vulnerability, and to promote
transparency and a long-term perspective in financial and
economic activities.
The Company’s work to be able to meet the mandatory and
voluntary regulations, including new requirements for the
integration of sustainability factors in strategies and business
processes, as well as new official reporting in progress within
the Company since 2021. Sustainability is also increasingly
important for competitiveness in the funding markets. Over
several years, Kommuninvest has established a position in the
Green Bonds market and has a favourable sustainability rating
from three leading players.
FINANCING, KNOWLEDGE, RESPONSIBILITY
Kommuninvest contributes through effective and sustainable
financing of municipal investments in long-term sustainable
welfare in Sweden’s municipalities and regions. A strong
ownership structure and the joint and several guarantee
provided by the Society’s members allow us to cost-efficiently
and stably fund our operations.
Our members’ extensive societal mission and investments,
as well as Kommuninvest’s position, being responsible for a
sizeable proportion of members’ funding, generate economies
of scale. The local government sector’s borrowing needs are
partly powered by ambitious climate-realignment plans.
Through financing products clearly oriented towards
environmental and social sustainability, we support both our
members’ and our customers’ sustainability efforts and are able
to meet investors’ demands for sustainable investments. We are
engaged in the development of market practices to promote
the use of, and to strengthen trust in, sustainable financing.
Since its launch in 2015, Kommuninvest’s green financing
programme has grown to become one of the largest in the
Nordic region.
Since 2021, a new product has been offered, Social
Sustainability Loans, focused in particular on fostering a
systematic approach and on following up/assessing social
initiatives in the local government sector. The Company has
also developed principles and methods to be able to monitor
the financial effects of ESG factors on borrowers and has
gradually integrated these into the credit process.
We are also working to build knowledge on debt management,
as part of good financial management in the local government
sector. By extension, this should give elected representatives
the best possible room for manoeuvre in delivering welfare
services to citizens. Given its socially beneficial role, it is
crucial that Kommuninvest be governed clearly to ensure the
operations are conducted responsibly.
STAKEHOLDER DIALOGUE
We maintain a continuous dialogue with those stakeholders
who, in various ways, influence and are affected by our
operations, to identify the sustainability issues with which the
Group should work. Our dialogue with stakeholders involves
meetings with members, customers, players in the financial
market, employee representatives, as well as government
ministries and national authorities. We also conduct surveys
among key stakeholders on an regular basis, including
members, customers, employees and investors, both more
traditional satisfaction surveys as well as more distinct
sustainability surveys.
Through competitive and sustainable financing solutions, as well as support and advisory
services in financing and investment issues, Kommuninvest seeks to foster sustainability
throughout Sweden. The Company’s work focuses on generating long-term sustainable
value.
KOMMUNINVEST ANNUAL REPORT 2024 18
SUSTAINABILITY REPORT
Swedish municipalities and regions are our most important
stakeholder group. As members, they own and govern our
operations, although, when they choose to borrow from us,
they are also our customers. In their capacity as owners, our
dialogue with members is conducted mainly with elected
politicians. In their capacity as customers, our dialogue with
members is conducted mainly with local government officials,
generally with specialists in economics and finance.
GOVERNANCE OF SUSTAINABILITY WORK
Kommuninvest i Sverige AB (the Company) is a wholly owned
subsidiary of the Kommuninvest Cooperative Society (the
Society), in which 296 municipalities and regions are members.
Each year, the Annual General Meeting of the Society adopts
owner directives formulating the framework for the operations,
the responsibility for which the Society assigns to the
Company’s Board of Directors.
Regarding sustainability, the owner directives stipulate that the
Company shall contribute to sustainable societal development
by observing and integrating economic, social and environ-
mental perspectives in its operations and governance. The
Company shall also work in accordance with the Swedish
climate target of net zero emissions by 2045, offering services,
advisory services and products meeting members’ and
customers’ sustainable financing needs.
In a Sustainability Policy, the Board of Directors of the
Company has established internal rules for how sustainability
perspectives shall be observed and integrated in operations.
The policy stipulates that sustainability perspectives shall
be integrated into the operations to foster sustainable value
creation in the Company.
The sustainability work is governed both by being integrated
into the Company’s traditional policies, such as the Code of
Conduct, Credit Policy, Capital and Liquidity Policy, as well
as through the Sustainability Policy and its instructions to the
President and CEO. All Company managers are responsible for
sustainability issues within their purview, subject to standard
review procedures.
The overarching responsibility for following up the integration of
sustainability into the operations in a value-generating manner
rests with the Finance Department, which includes part of the
Company’s specialist sustainability expertise.
In 2024, the Company strengthened its sustainability reporting
function and established interim targets for 2030 regarding
financed greenhouse gas emissions, in addition to the
Company’s long-term climate targets for 2045.
The governance of the Company’s operations is continuously
subject to internal review by the Company’s internal Audit, as
well as by the Company’s compliance function. Observations
addressed in 2024 have, for example, involved resource needs
for new and upcoming regulatory requirements in sustainability,
such as the EU’s Sustainability Reporting Directive (CSRD) and
management of sustainability risks.
KOMMUNINVEST ANNUAL REPORT 2024 19
SUSTAINABILITY REPORT
DOUBLE MATERIALITY ANALYSIS IN THE FRAMEWORK OF CSRD COMPLIANCE
In 2024, as part of the preparations for new sustainability requirements in accordance with the EU’s Sustainability
Reporting Directive (CSRD) and the associated European Sustainability Reporting Standards (ESRS), the Company
performed an initial assessment for a double materiality analysis.
All Companies covered by CSRD/ESRS shall report sustainability impacts based on the double materiality
principle, that is, including a company’s impact both on people and the environment (impact materiality) and the
impact or potential impact of sustainability on the Company from a financial perspective (financial materiality).
In the Company, the process of assessing impact materiality and financial materiality has been conducted by
internal cross-functional working groups. At the end of 2024, the Company initially identified four ESRS subject
standards as material and began efforts to establish data collection and quality assurance processes to meet
disclosure requirements.
During 2025, the Company determine an initial double materiality analysis, after which an annual review will be
conducted. The new reporting requirements are applicable for the Company as of the 2025 financial year.
Work in three dimensions
SUSTAINABLE FINANCING
ORGANISATION AND OPERATIONS
Green Loans
Green Bonds
Social Sustainability Loans
Social Bonds
Loans – advice –
research – education
Good financial housekeeping
Governance in financial balance
Financial administration
E.g. · Debt management · Owning/renting ·
Liquidity · Systems and analytical support
E.g. · Business travellers · Green requirements
purchasing · Energy consumption
E.g. · Working environment · Employee
collaboration · Equality · Diversity · Health
E.g. · Regulatory compliance · Handling
Conflicts of interest · Code of Conduct
Green
Social
Finance/
governance
Environment HR Responsibility
KOMMUNINVEST ANNUAL REPORT 2024 20
SUSTAINABILITY REPORT | ENVIRONMENTAL AND CLIMATE WORK
Environmental and climate work
To support Kommuninvest’s concept of facilitating sustainable
society throughout Sweden through financing, the Company’s
environmental and climate work has a broad approach.
This spans lending and credit risk management, including
sustainable financing programmes, to advice, research and
analysis and also includes the operations’ own environmental
impact.
Through competitive and sustainable financing solutions, as well as support and advisory
services in financing and investment issues, Kommuninvest seeks to foster sustainability
throughout Sweden. The Company’s work focuses on generating long-term sustainable
value.
PLAN TO REDUCE FINANCED EMISSIONS
As the local government sector’s largest lender,
Kommuninvest can aid its climate realignment.
According to our climate plan, Kommuninvest shall
provide tools and support enabling the municipal
and regional sectors’ achievement of Sweden’s
target of climate neutrality by 2045.
In 2024, as part of the climate plan, a base vale for
the Company’s financed greenhouse gas emissions
was calculated. The base year value provides
a starting position in terms of the scope of the
greenhouse gas emissions to which the Company
contributes through its operations, above all through
its lending to customers. This served as the starting
point for the reduction plan adopted during the year
that manifests the Company’s ambition, from the
2022 emissions levels, via interim targets for 2030,
to be able to achieve the target of climate neutrality
(net zero) by 2045.
The reduction plan also provides a list of measures
on which the Company intends to focus to reduce
carbon emissions. In 2025, the plan will be
developed as a realignment plan, in accordance
with CSRD/ESRS requirements.
Municipalities 38.2%
Regions 4.3%
Municipal energy companies 21.0%
Municipal property companies 4.9%
Green Loans: Renewable energy projects 10.7%
Green Loans: Green buildings projects 0.2%
Other
1
20.6%
1) Primarily corporate lending, except to energy or property companies, as
well as Sustainable Loans, except for renewable energy or green buildings.
KOMMUNINVEST’S FINANCED GREENHOUSE GAS EMISSIONS
Distribution in the lending portfolio, base year value 2022
FOUR PRINCIPLE LINES OF ACTION FOR REDUCING FINANCED EMISSIONS
1. Integrating climate realignment considerations into our
dialogue and partnership with customers and members,
as well as with public bodies and trade associations.
2. Engaging in research and analysis to foster a better
understanding of the impact of ESG factors on the local
government sector, including for financial and investment
planning.
3. Scaling up our offering and advisory services in sustainable
financing products.
4. Integrating and developing management of ESG risks in
our credit risk culture.
DISTRIBUTION OF FINANCED GREENHOUSE GAS EMISSIONS
A significant proportion of the greenhouse gas emissions
associated with the Company’s operations can be attributed
to emissions stemming from municipal operations and
investments financed by the Company through its lending.
About 75 percent of the Company’s financed greenhouse gas
emissions can be linked to six sub-portfolios in Kommuninvest’s
lending. For base year 2022, the financed emissions amounted
to 1.6 million tonnes CO
2
e.
CONTRIBUTE TO THE REALIGNMENT OF THE LOCAL GOVERNMENT SECTOR
The Company’s climate work builds on the climate plan
developed in 2022 setting out the direction for how
Kommuninvest in its role as a credit institute can foster the local
government sector’s environmental and climate realignment.
This work has a clear connection to CSRD, including its
impact on the Company’s strategy and Business Plan, and the
extended requirements on credit institutes to take sustainability
factors into account in their lending and supervision as clarified
in guidelines from the European Banking Authority (EBA).
KOMMUNINVEST ANNUAL REPORT 2024 21
SUSTAINABILITY REPORT | ENVIRONMENTAL AND CLIMATE WORK
ANALYSIS OF ENVIRONMENTAL AND CLIMATE RISKS
With regard to ESG risks, the Company has been working to
identify and define the environmental and climatic factors with
the greatest potential financial impact on its borrowers. Since
the autumn of 2023, environmental and climate factors are
integrated into the Company’s credit approval and monitoring
processes.
At an initial stage, four factors have been indicated as more
highly prioritised, two of which are categorised as physical risks
(flooding, landslides and erosion, as well as polluted water
or shortage of drinking water) and two as transitional risks
(negative effects on water sources and/or incidence of water,
as well as greenhouse gas emissions).
ADAPTING GREEN LOANS TO THE TAXONOMY
Kommuninvest launched a green financing programme
in 2015, the overall purpose of which is to promote the
transition to a low-carbon and climate-resistant society. In
2021, the programme received the Swedish Miljömålspriset
environmental objectives award for its contribution to the
environmental objective of limiting climate impacts. At the end
of the year, 710 (645) investment projects had been approved
for Green Loans, corresponding to a total SEK 126.5 (111.8)
billion in granted financing. Of the granted funds, SEK 91.6 (79.4)
billion had been disbursed by the end of the year, having been
financed through 11 (11) Green Bonds outstanding for a value of
SEK 76.3 (77.2) billion.
Financing can be granted for investment projects within any of
the eight categories included in the Company’s Green Bonds
framework: environmental measures, water management,
climate adaptation measures, green buildings, energy
efficiency, waste management, sustainable transport and
renewable energy.
In 2022, the Company initiated efforts to gradually and partially
adapt the framework to the EU taxonomy, regarding the
terms for qualifying to receive Green Loans. The first stage of
this adaptation entails all project categories for which this is
deemed possible and reasonable being required to meet the
criteria for “significant contribution” in relation to at least one
of the EU’s six environmental targets. The new Green Bond
framework was published in 2024, with the terms for Green
Loans taking effect as of December 2024.
DIRECT ENVIRONMENTAL AND CLIMATE IMPACTS ARE LOW AND
DECREASING
In addition to the measures being implemented to help
decrease indirect emissions through the lending operations,
continuously decreasing our own direct climate footprint
remains a priority. The focus is on the offices, predominantly
located in our own premises, and on business travel. Measures
including installation of solar panels, new ventilation fans and
replacing electric cooling units with district cooling has helped
reduce electricity consumption above all. Business travel is
mainly by rail today. The total carbon footprint, which dropped
below 1 tonne CO2e per employee and 100 tonnes CO2023e
for the operations as a whole, for the first time in 2023,
continued to decline in 2024.
GREEN PARTNERSHIP INITIATIVES
We partner with others to meet stakeholder ESG expectations
and to enhance the impact of our efforts. We partner, for
example, with Public Housing Sweden and IVL Swedish
Environmental Research Institute in the framework of a climate
roadmap project for public housing companies, where the
Company is specifically engaged in a package of efforts on
public housing financing and its realignment work.
The Company is also engaged in the strategic innovation
programme Viable Cities, which focuses particularly on
financing aspects for the 48 towns and cities working on
Climate contract 2030. We have also established cooperation
with special-interest and sector organisations in the local
government sector, such as SALAR and Swedish Water
(Svenskt Vatten).
KOMMUNINVEST ANNUAL REPORT 2024 22
SUSTAINABILITY REPORT | SOCIAL SUSTAINABILITY
Social sustainability
Kommuninvest’s lending means that essential welfare
investments can be implemented in a more appropriate
manner and at a lower cost for taxpayers. This reinforces the
welfare society with, for example, new or refurbished nursing
homes, schools, homes and care facilities.
For Kommuninvest to be able to meet its stakeholders’
expectations in the long term, it is crucial to have a sustainable
organisation. Among other things, this entails striving for an
organisation characterised by a strong culture and favourable
working conditions, with healthy and motivated employees and
managers, in which continuous learning is stimulated. It also
entails fostering equality, diversity and development and being
an inclusive (non-discriminatory) workplace.
For several years, Kommuninvest has been working pro-actively
with the health concept Sustainable Daily Life, seeking to
promote a healthy lifestyle, with a balance between work and
leisure.
GROWTH FOR SOCIAL SUSTAINABILITY LOANS
To foster development towards increased social sustainability
in Swedish municipalities and regions, Kommuninvest has
introduced Social Sustainability Loans. This product makes
it possible to finance socially oriented investments through
loans, in a manner promoting improved governance, review
and impact assessment. Social Sustainability Loans can help
strengthen local or regional sustainability work, show its benefit
and facilitate the development of shared practices and impact
assessment.
At the end of the year, 27 (20) Social Sustainability Loans
applications had been approved, corresponding to a total
of SEK 10.9 (6.7) billion in granted financing. The volume of
disbursed loans increased to SEK 4.6 (2.1) billion. Applications
for which financing was approved during the year included
long-term investments in housing and living environments in
Ale, Sollentuna and Örebro, a school upgrade in Linköping,
a cultural centre in Gävle, an aquatic centre in Partille
and development of an athletics and recreational area in
Landskrona.
Social Sustainability Loans seek to foster an culture of
assessing effects in the local government sector and systematic
social sustainability work on issues including knowledge
building and development of methods. The experience gained
from the initial years of the programme, which was launched in
2021, is that considerable potential exists.
A SOCIAL FINANCING MARKET IN SWEDEN
Kommuninvest participates in various ways in developing
market practices for financing social investments. The Company
has, for example, joined efforts to develop the Swedish
standard for measuring the effects of initiatives announced in
2024, initially with a terminology standard and a standard for
data collection planning.
The Company is also a member of the Effektfullt association,
which works to strengthen organisations’ capacity for
measuring, analysing and strengthening their effects on people
and the environment. It is also a member of Swedish NAB
(National Advisory Board for Impact Investing), which works to
increase the allocation of capital for impact investments.
At the end of the year, in dialogue with the capital market, the
Company began preparing to issue an initial social bond to
fund the portfolio of Social Sustainability Loans that has been
amassed.
SOCIAL FACTORS IN THE CREDIT PROCESS
Over the year, social factors were introduced in the manage-
ment of ESG risks in the credit process. Work has followed
the same principle as in the development of the impacts
of environmental and climate factors. Initially this entails
identifying and prioritising possible ESG factors, including
appropriate key figures, and then assessing borrowers’ potential
vulnerability to such factors translating into increased financial
risk.
Regarding social risk, the Company has developed a
socioeconomic index based on the Swedish Board of Housing,
Building and Planning’s Segregation Barometer. The index takes
into account data on the proportion of the population with a
low economic standard, receiving economic assistance and/
or experiencing long-term unemployment and having only pre-
upper secondary education.
Strong growth was noted in Social Sustainability Loans over the year, with granted and
disbursed loan volumes increasing by 63 and 114 percent respectively. The Company also
introduced social factors as part of its management of ESG risks in lending.
KOMMUNINVEST ANNUAL REPORT 2024 23
SUSTAINABILITY REPORT | GOVERNANCE AND RESPONSIBLE BUSINESS
Governance and responsible business
With regard to the financial sustainability dimension, our work
has a broad scope and essentially refers to:
• protecting Kommuninvest’s ability to offer cost-efficient and
stable financing of public investments
• advice to promote good financial management, governance
in financial balance and solid financial management
• long-term analysis for sustainable municipal finances
• to conduct a responsible business, in line with the rules that
apply and to live up to the demands and expectations that
may be imposed on a leading actor.
RESPONSIBLE OPERATIONS
A clear division of responsibilities and a focus on owner control,
corporate governance and ethics shall help the Group to
comply with the laws, regulations and rules applicable to the
operations. The work builds on the following circumstances:
• A clear division of responsibilities between the parent
organisation and the business operations. The Society
addresses membership and ownership matters, while the
Company addresses business issues.
• Annual ownership directives indicate the Company’s course
ahead. Risk appetite is low and professional conduct, strict
ethical requirements and good business practices are to
permeate the operations.
• Clearly regulated requirements on matters of corporate
governance, risk management and compliance, including in
areas such as money laundering and anti-corruption.
• Integrated sustainability work, in terms of both direct and
indirect impact.
• Commitment to relevant societal issues and coordination
with others, to meet stakeholder expectations and increase
the effect of our efforts.
STRATEGY FOR LONG-TERM MEMBER BENEFIT
Kommuninvest works long term to best be able to live up
to its assignment to contribute to a sustainable society
throughout Sweden through investment financing. This builds
on competitive and sustainable financing solutions, as well as
knowledge, support and advisory services on financing and
investment issues.
INCREASING AWARENESS ON LOCAL GOVERNMENT FINANCING
To increase knowledge of the local government sector’s long-
term financial conditions, the Society conducts its own research
and publishes reports detailing trends in local government
investments and their financing, including funding and debt
analyses. Knowledge is disseminated on an ongoing basis by
means of seminars and individual meetings. Kommuninvest
also partners and coordinates with academic institutions.
For several years, the Society has partnered with the University
of Örebro to promote research on the local government sector’s
debt management and financial conditions, and we finance
both a chair and post-graduate studies. The Company is also
part of the reference group affiliated with the university’s
Master’s programme in Sustainable Business.
GOOD GOVERNANCE AND BALANCED DEBT MANAGEMENT
Financial management is of great importance in being able to
secure long-term sustainability in the local government sector’s
finances, which is particularly important given the challenges
the local government sector faces as a result of demographic
changes and an uncertain economic environment.
Kommuninvest continuously adds new knowledge in this area,
through continuous support in analysis and considerations. In
2024, among other things, an updated reference material was
presented for calculating and determining guarantee fees.
RESEARCH REPORTS – CLEARER FOCUS
During the year, Kommuninvest initiated a change of direction in
its work with research reports. The former Research Committee
has been phased out, with research work being rearranged as
an internal process focusing more clearly on Kommuninvest’s
core mission. Over the year, four external research reports
were published, two of which involved budget models, one
addressed community building capacity and one addressed
accuracy in population projections.
ETHICS AT THE FORE
Kommuninvest operates in two trust sectors, the financial and
public sectors. Accordingly, it is central that we conduct sound
and sustainable operations. Both the Company’s Sustainability
Policy and Code of Conduct emphasise the importance of
ethical and responsible action. Our success depends on
the trust of members, customers, counterparties, investors,
employees and authorities.
Any conflicts of interest are to be identified and handled
efficiently and effectively to prevent negative impacts on
customers, members or the Company.
With regard to tax matters, the Company’s actions must be
responsible, correct and transparent. The Company shall not
participate in transactions or make products available that may
be questionable in relation to applicable tax legislation. Where
there is any doubt, the Company shall refrain from participating.
ANTI-CORRUPTION AND ANTI-MONEY LAUNDERING MEASURES
A risk-based approach is applied to ensure that the Company’s
products and services are not used for money laundering
or terrorist financing. Suspicions of serious irregularities that
could entail or lead to abreach of law are to be reported.
Such violations can also be reported anonymously via a
whistleblower function handled by an external party. No
suspicions of corruption or money laundering were identified
during the year.
The Company’s compliance department works to monitor
and control the Company’s compliance with laws and other
regulations. The department also provides advice to the
Company’s Board of Directors, CEO and personnel, as well
as providing training in the area to enhance employees’
knowledge and vigilance.
Through Kommuninvest’s operations, conditions are generated for efficient use of public
funds, for increased stability in the financial system and for well-developed sustainability
processes in the local government sector. During the year, governance was introduced as
part of the management of ESG risks in the credit process.
KOMMUNINVEST ANNUAL REPORT 2024 2424
SUSTAINABILITY REPORT | GOVERNANCE AND RESPONSIBLE BUSINESS
EDUCATIONAL INITIATIVES SUPPORT OUR WORK
Employees and managers at Kommuninvest are expected
to participate in the educational courses that are offered to
ensure that the Company as a whole, as well as its individual
employees, have the knowledge required for the Company to
be able to fulfil its assignment, including regulatory compliance.
Also during the year, micro-training was offered in data and
cybersecurity, secure software development, as well as data
protection to maintain and raise awareness in these areas.
Courses were also offered in insider information, corruption
and bribery, as well as on money laundering and financing
of terrorism. The implementation rate varied over the year,
between at least 50 and at most 97 percent of employees
being offered course participation.
GOVERNANCE-RELATED FACTORS IN THE CREDIT PROCESS
During the year, governance was introduced as part of
the management of ESG risks in the credit process. Work
has followed the same principle as in the development of
impacts of environmental, climate and social factors on credit
assessment. Initially this entailed identifying and prioritising
possible ESG factors and key figures, and then assessing
borrowers’ potential vulnerability to ESG factors translating into
increased financial risk. Regarding governance, the Company
has initially elected to follow up on the incidence of modified
auditor’s reports among its counterparties, as an expression
of shortcomings in governance and review. The relevance and
accuracy of this indicator will be assessed.
KOMMUNINVEST ANNUAL REPORT 2024 25
SUSTAINABILITY REPORT | SUSTAINABILITY INDICATORS
Sustainability indicators
SUSTAINABLE FINANCING
Unit 2024 2023 2022
Lending volume
Total lending to municipalities, regions, municipal companies, etc. SEK, million 544,428.3 508,802.2 470,675.8
Share of the sector’s financing
1
% N/A 58 59
Operating expenses, excluding the resolution fee/risk tax, as % of balance sheet total % 0.054 0.047 0.043
Green Loans, volume outstanding, disbursed SEK, million 91,561 79,422 66,428
Green Bonds, volume outstanding
2
SEK, million 76,276 77,249 66,294
Green Loans, proportion % 17 16 14
Social Sustainability Loans, volume outstanding, disbursed SEK, million 4,561 2,135 1,001
1) As of the reporting for 2024, the values represent actual outcomes – forecast market share was previously applied.
2) As of the reporting for 2024, Green Bonds are valued excluding derivatives – values for previous years have been adjusted.
ENVIRONMENTAL INDICATORS – KOMMUNINVEST GROUP
Unit 2024 2023 2022
Energy consumption
Total energy consumption (in buildings)
1
kWh 518,162 516,958 536,811
– of which, electricity kWh 196,171 203,528 248,268
– of which, heating kWh 242,654 237,786 216,381
– of which, cooling kWh 79,926 76,322 72,244
– of which, solar power kWh -36,111 -20,942 -5,586
Change in energy consumption, compared with the preceding year % 0.2 -3.7 -4.3
Total CO
2
impact of energy consumption (in buildings) Tonnes 17 59 91
– of which, electricity consumption
2
Tonnes 18 64 78
– of which, from heating
3
Tonnes 3 3 15
– of which, solar power Tonnes -3 -6 -2
Proportion of renewable energy in energy consumption of electricity % 100 100 100
Proportion of renewable energy in energy consumption for heating % 100 100 100
Proportion of renewable energy in energy consumption for cooling % 100 100 100
Total office space m
2
2,357 2,217 2,217
Total energy consumption per square metre kWh/m
2
220 233 242
Total energy consumption per employee kWh/employee 4,506 4,971 5,478
Resource usage
Purchased office paper Tonnes 0.3 0.3 0.3
–of which sustainability labelled paper (PEFC) Tonnes 0.3 0.1 0.1
Proportion of sustainability labelled office paper, of total purchases % 100 33.3 33.3
Total paper consumption per employee Kg 2.5 2.5 2.7
Paper recycling, incl. purchased and delivered paper Tonnes 2.3 1.8 2.1
CO
2
emissions avoided as a consequence of recycling
4
Tonnes CO
2
e 1.4 1.5 1.4
Business travel
Total business travel
5
Km 486,734 388,678 494,654
Total business travel per employee Km 4,232 3,737 5,047
Total air travel Km 197,997 166,973 275,250
Rail travel in Sweden Km 247,536 194,386 203,382
Total CO
2
emissions from business travel Tonnes 48 38 61
CO
2
emissions from business travel, per employee Tonnes 0.4 0.4 0.6
Total climate footprint
Total climate footprint of the operations
6
Tonnes 65 97 152
Total climate footprint per employee, CO
2
e Tonnes 0.6 0.9 1.6
1) Gross solar production: 36,700 kWh (reading on 7 January 2025) of which 36,111 kWh was used for
the building’s own energy consumption, while 589 kWh was delivered to the grid.
2) Climate impact from electricity usage calculated with emission factor for Nordic electric mix of 90g
CO
2
e/kWh, based on SMED Report No. 4, 2021. For 2023 and 2022, the emissions factor of 315g
CO
2
e/kWh was used in accordance with the consistency method in Nordic Position Paper on Green
Bonds Impact Reporting. The reported values are within Scope 2, in accordance with the
Greenhouse Gas Protocol.
3) Climate impact from heating, calculated with the latest available emissions factor for district heating
in the Municipality of Örebro, which was 11.72g CO2e/kWh for 2023. The emission factor is retrieved
from E.ON and Swedenergy. The emissions factors for 2023 and 2022 have been adjusted as pre-
vious calculations did not take total greenhouse gas emissions from heating into account.
4) Data for 2024 is preliminary, data for 2023 and 2022 have been adjusted compared with the 2023
Annual Report. Emissions avoided for the year (tonnes CO
2
e) as a consequence of recycling break
down between 0.66 tonnes of electronics, 0.04 tonnes of plastics, 0.48 tonnes of paper, 0.27 tonnes
of iron, 0 tonnes of hazardous waste and -0.1 tonnes of alternative raw materials. Source: Stena
Recycling, 14 Jan 2025 Kommuninvest does not include emissions avoided by recycling resources,
as the climate impact of the purchases in question has not been calculated.
5) The values include adjustments for high altitude factor and, to a large extent, other greenhouse
gases.
6) Includes CO
2
emissions from energy consumption and business travel. All Scope 1 and Scope 2
emissions, as well as Scope 3 emissions from business travel.
KOMMUNINVEST ANNUAL REPORT 2024 2626
SUSTAINABILITY REPORT | SUSTAINABILITY INDICATORS
GENERATING FINANCIAL VALUE – KOMMUNINVEST GROUP
Unit 2024 2023 2022
Total revenue
Interest revenues SEK, million 23,748.5 20,845.0 4,914.0
Other operating income SEK, million 16.6 14.9 12.0
Distributed value
Interest expenses SEK, million -22,726.1 -19,853.4 -4,248.1
Commission expenses SEK, million -13.9 -13.1 -11.7
Salaries and emoluments SEK, million -92.9 -85.0 -78.1
Pension expenses, temporary/contract personnel, education/training expenses and
other payroll expenses SEK, million -30.2 -28.6 -25.9
Social security contributions and payroll tax on pension expenses SEK, million -33.4 -30.3 -27.3
Resolution fee SEK, million -23.5 -17.1 -25.0
Other operating expenses SEK, million -175.5 -123.9 -105.9
Tax SEK, million 0.0 -13.8 13.9
Transferred to the members of the Society during the year, refunds on business
volumes and interest on member contributions for the previous financial year SEK, million 373.0 - 472.9
Efficiency
Operating expenses, excluding the resolution fee/risk tax, as % of balance sheet total % 0.054 0.047 0.043
In this note, revenues are recognised as positive and expenses as negative.
Unit 2024 2023 2022
Total number of employees, including those in part-time and probationary employment Number 128 109 105
Proportion of women/men – total % 47/53 42/58 40/60
Proportion of women/men – all managers % 53/47 53/47 36/64
Proportion of women/men – Executive Management Team % 67/33 56/44 43/57
Average number of full-time annual employees (based on hours worked) Number 112 104 98
Employment period <2 years (based on permanent employees) % 31 29 17
Employment period 2–4 years % 24 20 17
Employment period 5–9 years % 18 19 33
Employment period >10 years % 27 32 33
Personnel turnover % 10 12 15
Participation in employee survey % 93 92 96
Proportion of employees with university education % 93 93 92
Proportion of employees who had development interviews % 100 100 100
Proportion of employees who have undergone sustainability training
1
% 72 95 87
1) Dedicated sustainability training was not conducted in 2024, but is planned for 2025. The value for 2024 is an estimate.
EMPLOYEE STATISTICS – KOMMUNINVEST GROUP
KOMMUNINVEST ANNUAL REPORT 2024 2727
SUSTAINABILITY REPORT | AUDITOR’S OPINION
Auditor’s opinion regarding the statutory
Sustainability Report
TO THE ANNUAL GENERAL MEETING OF KOMMUNINVEST I SVERIGE AB
(PUBL), CORPORATE IDENTITY NUMBER 556281–4409
Engagement and responsibility
The Board of Directors is responsible for the 2024 Sustainability
Report on pages 17–26 and for this being prepared in
accordance with the older wording applicable before 1 July
2024.
The scope of the examination
Our review was conducted in accordance with FAR’s
recommendation RevR 12 The auditor’s opinion regarding
the statutory Sustainability Report. This means that our
examination of the statutory Sustainability Report is different
and substantially less in scope than an audit conducted in
accordance with International Standards on Auditing and
generally accepted auditing standards in Sweden. We believe
that the examination has provided us with sufficient basis for our
opinion.
Opinion
A statutory Sustainability Report has been prepared.
Stockholm, February 12th 2025
Ernst & Young AB
Mona Alfredsson
Authorised Public Accountant
Board of
Directors’
Report
Unless otherwise indicated, comparison figures in the
income statement refer to the preceding year (1 January
– 31 December 2023). Comparative balance sheet and
risk related figures relate to 31 December 2023 unless
otherwise indicated.
Comments on the income statement, balance sheet and
statement of changes in equity are provided in connection
with the statements on pages 50, 52 and 54 thereof.
In accordance with Chapter 6, Section 11 of the Annual
Accounts Act, Kommuninvest i Sverige AB has chosen to
prepare the statutory sustainability report separately from
the Annual Report. The Sustainability Report is available
on pages 16–26 of this document.
KOMMUNINVEST ANNUAL REPORT 2024 29
BOARD OF DIRECTORS’ REPORT | LENDING
CONTINUED GROWTH
In 2024, Sweden’s municipalities and regions continued to
operate in a changing environment with extensive geopolitical
uncertainty. With an economic situation pervaded by lower
inflation rates, falling interest rates and hopes of a stronger
economy, the long-term conditions for the Swedish local
government sector have brightened. The variations are,
however, considerable. Some municipalities, and most of the
regions, have worked hard to keep their finances in order.
The regions have had a particularly tough time. At the same
time, municipalities with a more favourable economic starting
point have taken vigorous initiatives to develop their future
investment planning.
Investment patterns have been pervaded by extensive
maintenance and renovation needs in properties, housing and
other infrastructure. Many municipalities have gotten to grips
with necessary water and sewerage investments. Another
expansive area has been homes for the elderly. Generally
speaking, the green realignment has been driven both by
specific investments and increased investment requirements
on a broad front in the local government sector. Investment
trends have, to a certain extent, been attenuated by lower
new housing production and a lower population growth rate,
resulting in decreased needs for new investments in preschools
and schools.
On the whole, the investment rate has been relatively high.
With a degree of self-financing considered to have been low,
and with finances still under pressure in many areas, this has
generated substantial borrowing needs. Municipalities and
regions have borrowed extensively in 2024, both through
Kommuninvest and their own market programmes. In that
context, with substantial activity in the municipalities’ own
market programmes, Kommuninvest’s market share appears
to have decreased slightly from the outcome of 58 percent
entering 2024.
At the end of the year, Kommuninvest’s lending amounted to
SEK 545.2 (511.9) billion in nominal terms. Accordingly, lending
growth ended up at 6.5 (6.1) percent. Of new lending for the
year and renegotiations of existing loans, 82 (86) percent were
loans with capital tied up for more than one year and 18 (14)
percent were loans with capital tied up for one year or less.
Loans with capital tied up for one to three years comprised
39 (35) percent of volumes. At the end of 2024, the lending
portfolio consisted of 65 (57) percent fixed-interest loans and 35
(43) percent variable-interest loans.
CONTINUED STRONG DEVELOPMENT FOR GREEN LOANS
In 2024, the number of granted projects passed 700, qualifying
199 of Kommuninvest’s members for Green Loans. At the end
of 2024, 710 projects had been approved, equivalent to SEK
126.5 (111.8) billion in Green Loans. Of the growth in approved
projects of SEK 14.7 billion over the year, about SEK 9.0 billion
pertained to investments in green buildings, SEK 3.2 billion to
investments in water and sewerage and about SEK 1.1 billion
to renewable energy and sustainable transport. These were
the project categories that drove green growth over the year
and that were also the largest project categories overall in
Kommuninvest’s green lending portfolio. Of the total amount
granted, SEK 91.6 (79.4) billion had been disbursed by the end
of the year. Additional information on Green Loans is provided in
the statutory Sustainability Report.
PROGRESS FOR SOCIAL SUSTAINABILITY LOANS
Over 2024, Social Sustainability Loans grew due to larger
applications, in terms of volume, from, for example, Landskrona
(SEK 1.2 billion), Alebyggen (SEK 1.0 billion) and PartilleBo (SEK
0.7 billion). Major investments in sports and health represented
the project category driving growth in Social Sustainability
Loans over the year. The category representing the largest
share of granted loan volumes was public housing in specific
areas, where Botkyrkabyggen’s granted initiative corresponds
to slightly more than 30 percent of the total volume of Social
Sustainability Loans. By the end of 2024, SEK 10.9 (6.7) billion
in Social Sustainability Loans had been granted, distributed
between 27 (20) different projects and 20 (16) members. The
corresponding amount for disbursed Social Sustainability
Loans was SEK 4.5 (1.7) million. Additional information on Social
Sustainability Loans is provided in the Sustainability Report.
Continued lending growth
Kommuninvest’s lending grew to SEK 545.2 (511.9) billion in 2024. That gave a growth rate of
6.5 (6.1) percent. The combination of increased investment and lower self-financing rate in
the local government sector led to a continued high level of demand for loans. At the start of
2024, Kommuninvest’s market share was 58 percent. At the end of 2024, Kommuninvest had
a total of 1,041 (1,027) active borrowers.
LOANS PROVIDED ONLY TO SWEDISH MUNICIPALITIES AND REGIONS
All of Kommuninvest’s lending is to Swedish municipalities and regions. Loans may be offered to:
• Municipalities and regions who are members of the Kommuninvest Cooperative Society.
• Municipal and regionally-owned companies, in which one or more members of the Kommuninvest Cooperative Society,
against a guarantee, holds a controlling influence.
• Local government foundations and associations, on the condition that a guarantee is provided and that they are closely
affiliated with a member or members of the Kommuninvest Cooperative Society.
KOMMUNINVEST ANNUAL REPORT 2024 30
BOARD OF DIRECTORS’ REPORT | LENDING
NUMBER OF MEMBERS AND LENDING VOLUME
1988–2024
Number of members in the Kommuninvest Cooperative Society
Lending (nominal value), Kommuninvest i Sverige AB
An increased number of members in the Society, and members choosing to place an increasingly large share of their funding with the Company, are the foremost reasons for
the historical growth in lending.
Number SEK, bn
KOMMUNINVEST ANNUAL REPORT 2024 31
BOARD OF DIRECTORS’ REPORT | FUNDING
LIQUIDITY STRATEGY
Kommuninvest’s strategy builds on its presence in three
strategic funding markets, matching of assets with liabilities
and a sizeable reserve. The three strategic funding markets
are denominated in SEK, USD and EUR. Funding is agreed to
replace loans that mature, to finance new loans and to adjust
the size of the liquidity reserve depending on the market and
liquidity preparedness requirements.
Over the year, market conditions were pervaded by geopolitical
concerns and falling interest rates with declining inflation. The
Company’s liquidity strategy worked well in 2024. Access to
liquidity has been good and Kommuninvest has been able
to finance its customers’ funding needs on favourable terms,
despite occasionally challenging market conditions.
FOCUS ON BENCHMARK FUNDING
Over the year, funding totalling SEK 147.2 (142.6) billion was
raised in bonds with maturities of more than one year. Funding
through short-term commercial papers, with maturities of less
than one year, amounted to SEK 86.2 (54.2) billion. Previously
issued funding of SEK 12.0 (12.8) billion was repurchased and
SEK 203.1 (173.5) billion matured.
Kommuninvest continued to issue Green Bonds according to
plan. Funding through Green Bonds finances green investment
projects by Swedish municipalities and regions.
Significant borrower with highest credit rating
Kommuninvest borrows money in capital markets in Sweden and internationally to fund its
lending to municipalities and regions. The funding operations functioned well over the year,
with demand for Kommuninvest’s bonds being favourable. The joint and several guarantee
from the members forms the basis for the Company’s high creditworthiness (AAA/Aaa),
which helps make Kommuninvest a secure investment option. At the end of the year, total
funding amounted to SEK 589.4 (550.7) billion in nominal terms.
A SIGNIFICANT SSA ISSUER
Kommuninvest issues securities on international funding
markets in the category “Sovereigns, Supranationals and
Agencies” (SSA). With large annual funding volumes,
Kommuninvest is a major international player in the
SSA segment. Borrowers with whom Kommuninvest
compares itself include:
• Bank Nederlandse Gemeenten (Netherlands)
• European Investment Bank, EIB (Europe)
• KfW (Germany)
• Kommunalbanken (Norway)
• Kommunekredit (Denmark)
• Municipality Finance (Finland)
• Nordic Investment Bank, NIB (Nordic region and Baltic
states)
NEW FUNDING BY PROGRAMME
1
1 Jan–31 Dec 2024
(1 Jan–31 Dec 2023)
¹ Excl. commercial paper funding.
NEW FUNDING BY CURRENCY
1
1 Jan–31 Dec 2024
(1 Jan–31 Dec 2023)
¹ Excl. commercial paper funding.
Swedish Benchmark Programme 49.4 (46.5) %
Benchmark funding, other currencies 39.4 (30.7) %
Green Bonds 11.2 (22.8) %
SEK 52.6 (52.6) %
EUR 24.2 (13.2) %
USD 23.2 (34.1) %
KOMMUNINVEST ANNUAL REPORT 2024 32
BOARD OF DIRECTORS’ REPORT | FINANCIAL POSITION
Financial position
At the end of the period, Kommuninvest’s total assets
amounted to SEK 613,315.0 (568,911.1) million. Lending to
municipalities and regions accounts for the bulk of the assets
and amounted to SEK 544,428.3 (508,802.2) million at the end
of the year (recognised value).
EQUITY
As of 31 December 2024, equity amounted to SEK 11,916.7
(11,055.5) million.
On the closing date, the share capital amounted to SEK
10,900.0 (10,175.0) million, divided between 10,900,000
(10,175,000) shares. The total share capital is attributable to the
members of the Society and no shares are available for trade.
CAPITAL ADEQUACY AND LEVERAGE
The Company is well capitalised to withstand the operations’
risks, with capital relationships exceeding the prescribed
minimum requirements in Pillar I, the capital base requirement
in Pillar II, as well as the combined buffer requirement by a good
margin. Finansinspektionen (Swedish Financial Supervisory
Authority) does not impose any Pillar II guidance requirements
at the company level – only at the Group level.
The core Tier I capital amounted to SEK 11,625.9 (10,757.1)
million, entailing a core Tier I capital ratio of 337.9 (354.9)
percent. The Company’s capital base consists solely of core
Tier I capital and the total capital ratio also therefore amounts to
337.9 (354.9) percent. See also Note 3.
At the close of 2024, the Company had a leverage ratio of 18.0
(20.2) percent.
RATING
The Company holds the highest credit ratings – AAA from S&P
Global Ratings and Aaa from Moody’s. In the autumn of 2024,
the rating agencies confirmed the Company’s rating, with
continued stable outlook. As the basis for their assessment,
the rating agencies highlight the joint and several guarantee
from the owners of the Cooperative Society, the mandate the
Company has from its owner to act as a local government debt
office for its members, the high quality of the loan portfolio and
the strategy for building up capital.
Kommuninvest also receives high so-called ESG ratings
from a number of players, including ISS-oekom, MSCI and
Sustainalytics. The assessments show that Kommuninvest
is considered to belong to the group of financial institutions
whose operations have a low exposure to sustainability risks.
COMMENTS ON THE
ACCOUNTS
The Financial
statements section
includes comments on
the income statement,
balance sheet and
statement of changes
inequity. These
comments form part of
the Board of Directors’
Report.
AAA Aaa
At the end of 2024, equity in the Company amounted to SEK 11,916.7 (11,055.5) million,
following Group contributions of SEK 647.2 (388.4) million paid to the Kommuninvest
Cooperative Society. The total capital base was SEK 11,625.9 (10,757.1) million, which gave
a total capital ratio of 337.9 (354.9) percent.
EQUITY
SEK, million
14,000.0
12,000.0
10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
0.0
KOMMUNINVEST ANNUAL REPORT 2024 33
BOARD OF DIRECTORS’ REPORT | PROPOSED DISTRIBUTION OF EARNINGS
Proposed distribution of earnings
The current regulatory framework for capital requires
Kommuninvest to always maintain a capital base equivalent to
the Company’s total risk-based capital base requirement and
the Company’s total capital requirement for the leverage ratio,
whichever is higher. The total capital ratio amounted to 337.9
(354.9) percent, compared with the requirement, including
buffer requirements and the specific capital base requirement,
of 87.3 (87.3) percent. The leverage ratio amounts to 18.0 (20.2)
percent, compared with the legal requirement of 3 percent
introduced in June 2021.
Following the proposed appropriation of profit, the capital base
amounts to SEK 11,625.9 (10,757.1) million. The risk-based capital
base requirement amounts to SEK 275.2 (242.5) million and the
capital base requirement for the leverage ratio amounts to SEK
1,934.3 (1,600.1) million.
A specification of items can be found in Note 3, see section
Capital adequacy. The Company has paid Group contributions
to the Society of SEK 647.2 (388.4) million, with this being
reported against unrestricted equity.
Unrealised changes in the value of assets and liabilities affected
equity by a net SEK 50 million.
Kommuninvest’s financial position does not give rise to any
assessment other than that Kommuninvest can be expected
to fulfil its obligations in both the short and the long term. For
information on Kommuninvest’s net profit and general position,
please refer to the income statements and balance sheets with
associated comments on the financial statements.
The Board of Directors proposes that:
Net profit 505,055,894
Unrestricted share premium reserve 540,000,000
Profit or loss brought forward -51,992,636
Total 993,063,258
To be appropriated as follows:
to be carried forward 993,063,258
KOMMUNINVEST ANNUAL REPORT 2024 34
BOARD OF DIRECTORS’ REPORT | RISK AND CAPITAL MANAGEMENT
Low risk tolerance and effective risk
management
RISK MANAGEMENT AND RISK EXPOSURE IN 2024
In 2024, inflation began to abate, affording the central banks
scope to start lowering interest rates. At the same time,
higher interest rates entailed highly favourable net profits for
the banking sector where the risk level has historically been
very low. The US elections saturated much of the autumn,
with the outcome possibly causing geopolitical risks looking
forward. Municipalities and regions continue to face major
challenges, with 2024 generally constituting a very weak year.
For the sector, 2025 is expected to be a stronger year, while
demographic challenges and infrastructure investment needs
prevail. In 2024, Kommuninvest enjoyed continued favourable
development given the conditions in the financial market.
Risk profile
Kommuninvest plays a central role in the financing of
investments by Swedish municipalities and regions. The
Company raises funding in the financial market on the basis of
customers’ needs. The business model entails the Company
being exposed to risks associated with the financial market,
the Swedish central government and the local government
authorities’ financial conditions, their challenges in terms of
climate and sustainability, as well as internal and external
operational risks. The Company’s risk profile and permitted
risk-taking is established annually in the owner directives, which
are adopted by the Annual General Meeting of the Society. The
Ownership Directive states that the Company shall have a low
level of risk taking that is at no time greater than necessary in
meeting the purposes of the operations and the application
of the Ownership Directive. The risk level may not exceed a
permissible level of risk-taking for any individual member in
accordance with the Swedish Local Government Act. For an
overview of the risk types managed and measured regularly
by Kommuninvest, see the below table – Kommuninvest’s risk
management in brief.
Risk policy
The Company’s risk management is based on the Board of
Directors’ risk policy. This is based on four risk categories: Net
profit and equity, Liquidity and funding, Credit and market,
and Operational risks. For each risk category, qualitative and
quantitative risk appetites have been determined, against which
all risks are measured. Risk appetite is defined as the level of
risk to which the Board is prepared to expose the Company for
the purpose of fulfilling the assignment from the owners. The
level of risk appetite is determined by factors including financial
position, growth targets, market conditions for the given time
period and whether efficiency gains can be achieved when
risk-taking changes. The risk strategy is part of the Company’s
risk framework, which comprises the Board of Directors’
fundamental instruments of operational governance and good
internal control.
Risk organisation
Overall responsibility for the control and follow-up of the
Company’s risk framework rests with the Company’s CRO. The
manager of each individual area of operations is responsible for
risk management and control within those operations. Forward-
looking and historical analyses are used to ensure that the
Company identifies, assesses and measures risks correctly. The
Credit Committee is a body that manages changes in limits,
credits and counterparty limits, as well as other credit issues
requiring a decision. The Company’s ALCO is responsible for
issues concerning internal capital and liquidity assessment, and
recovery plans requiring a decision. The Company’s Regulatory
Committee prepares matters regarding new regulations, as
well as preparing and approving proposals regarding internal
governance documents. The Company’s Development
Committee adopts the operational management and data
governance process. The Company’s Continuity and Crisis
Committee bears the overarching responsibility for planning,
controlling and coordinating the continuity management
and contingencies process. The Company includes three
independent control functions: the Risk Department, the
Regulatory Compliance Department and the Internal Audit.
Together, the Risk and Compliance departments form the
Company’s second line of defence, while the Internal Audit
forms the Company’s third line of defence. The three different
lines of defence are visualised in the organisational chart below.
The Company’s principal assignment is to ensure access to stable and efficient funding
for the local government sector. This entails raising funding in the financial market, in
accordance with customers’ needs. The operations shall apply a low level of risk-taking,
with risks only being accepted to be able to fulfil the assignment. Presented below is a
comprehensive overview of the Company’s targets, principles and methods for managing
risk.
KOMMUNINVEST ANNUAL REPORT 2024 35
BOARD OF DIRECTORS’ REPORT | RISK AND CAPITAL MANAGEMENT
Kommuninvest i Sverige AB (PUBL)
President and CEO
Kommuninvest Cooperative Society
Research
and training
Internal Audit
ALCO
Credit Committee
Regulatory Committee
Continuity
and Crisis Committee
Development Committee
Internal Audit
Executive Secretary
Secretary of the Board
of the Kommuninvest
Cooperative Society
Risk Department
Compliance
Department
Communications
Department
HR Department
IT and
Development
Department
Lending and
Advice
Department
Economy and
Finance
Department
Legal and
Procurement
Department
ORGANISATIONAL CHART WITH THE OPERATIONS’ THREE LINES OF DEFENCE
1st line
2nd line
3rd line
Risk Department
The Risk Department exercises overall risk control and monitors
the Company’s financial and operational risks. The Board
of Directors receives regular updates on risk control issues.
The function is separate from the business operations and
reports to the CEO and the Board of Directors. The Company’s
CRO is responsible for the department and is appointed by
the Board of Directors. The department is responsible for
monitoring the accuracy of risk reporting in accordance with
applicable external and internal rules, and regularly performing
stress tests. It is also responsible for ensuring that all relevant
information regarding the Company’s risk management is
available to the Board of Directors and the Management.
Office support
The Company’s regulatory compliance department is a control
and support function that is independent and organisationally
separated from the functions and areas that it shall monitor
and control. The regulatory compliance department identifies,
measures, analyses and reports on regulatory compliance
risks. The head of the regulatory compliance department is
appointed by the Board of Directors and reports directly to both
the CEO and the Board of Directors on regulatory compliance
matters. This function is responsible for monitoring and
controlling regulatory compliance in the licensed operations
and provides advice and resources for the operations, executive
management and the Board of Directors on legal matters
and other regulatory issues. This also includes verifying and
assessing the suitability and efficiency of the procedures and
measures taken to minimise the risk that applicable rules are
not adhered to. The Chief Compliance Officer is also functionally
responsible centrally in accordance with anti-money laundering
and financing of terrorism regulations.
Internal Audit
The Company’s Internal Audit, which is outsourced to an
external party, is an independent review function that reports
to the Board of Directors. The Internal Audit is responsible
for evaluating risk management, the Company’s control and
governance processes and for the operations being conducted
in accordance with the Company’s internal regulations.
The Internal Audit reports to the Board of Directors and the
President and CEO on an ongoing basis. Each year, the Board
of Directors establishes a plan for the work of the Internal Audit.
The President reports to the Board on measures implemented
as a consequence of the Internal Audit unit’s reports.
KOMMUNINVEST ANNUAL REPORT 2024 36
BOARD OF DIRECTORS’ REPORT | RISK AND CAPITAL MANAGEMENT
Risk category Risk category Risk description and definition
Net profit and capital
Net profit has a direct effect on the Company’s equity and sufficient net profit and capital are
prerequisites for the Company’s long-term development.
Net profit and capital Strategic risk
The risk that, due to losses or other balance sheet effects, the Company has insufficient capital to
conduct and develop its operations in accordance with established plans.
Net profit and capital Business risk
The risk that, due to prices, trust issues, efficiency or other reasons, the Company is not
competitive in the market and is therefore gradually losing volumes and profitability. The risk
that net profit fails to meet targets for continued development, dividend targets and capital
requirements.
Liquidity and funding
The Company’s operations are based on continuous funding in the market. The Company’s
capacity to conduct funding at relevant market prices is a decisive factor for the operations.
Liquidity and funding Liquidity risk (short and long-term)
The risk of not meeting a payment commitment on the due date and/or not being able to meet
a customer’s financing needs.
Liquidity and funding Refinancing risk The risks of not being able to conduct funding in the market due to internal or external events.
Credit and market
The Company provides credit to municipalities and municipal companies. Funding and lending
both include market risks given the operations’ conditions.
Credit and market Concentration risk
The risks that the Company is overexposed to an individual counterparty, sector, asset class,
geographical region or other factor.
Credit and market Counterparty risk
The risks that a counterparty to a derivative or repo transaction defaults before final settlement
of cash flows. The risk also includes potential concentrations among individual counterparties.
Credit and market Credit risk lending The risks that the counterparty to a loan fails to meet its obligations.
Credit and market Market risk
The risks of a loss and/or negative impact on the Company’s income, due to interest and/or
exchange rate changes.
Operational
The risk of losses resulting from inadequate or faulty internal processes, people and systems
or external events, including, but not limited to, legal risks, model risks and information and
communication technology risks (ICT risks), with the exception, however, of strategic and
reputational risks
Operational Process risk
The risk of losses resulting from inadequate or faulty internal processes, external events,
including, but not limited to, legal risks and model risks.
Operational Personnel risk The risk of losses resulting from human error.
Operational
Information and communication technology
risk (ICT risk)
The risk that every reasonably identifiable circumstance in connection with the use of network
and information system that, if it occurs, could jeopardise security in network and information
systems, tools or processes that are technology-dependent, functions and processes or the
provision of services by causing negative effects in the digital or physical environment.
Operational Compliance risk
The risk of the Company failing to comply with current external or internal regulations and
thereby risking being sanctioned, suffering losses or impairment or loss of reputation.
Sustainability Sustainability risk
1
The risk of negative financial consequences resulting from current or future effects of
environmental, social responsibility or corporate governance factors (ESG factors) on the
institute’s counterparties or invested assets. ESG risks are realised through the traditional
financial risk categories
KOMMUNINVEST’S RISK MANAGEMENT IN BRIEF
1) Sustainability risks are addressed and verified under other relevant risk categories and have no specific risk appetite.
KOMMUNINVEST ANNUAL REPORT 2024 37
BOARD OF DIRECTORS’ REPORT | RISK AND CAPITAL MANAGEMENT
NET PROFIT AND CAPITAL
Net profit
The Company has no vested interest in generating profit. Its
purpose is to provide economic benefit to members and,
following any necessary consolidation, profits accrue to the
members. Pricing is based on the requirements for financial
results stated in the ownership directives. These requirements
mean that the margin between funding and lending rates must
be sufficient to cover the operating expenses of the Company
and the Society. The margin shall also provide an opportunity
for a return on members’ contribution capital.
Strategic risks and business risks
Strategic risks in connection with net profit and capital shall
primarily be addressed through the Company’s internal capital
and liquidity assessment (ICLA) in which the Risk Department
participates. Risk management in connection with net profit
and capital also occurs within this framework, but shall also be
conducted on an ongoing basis by following up the Company’s
risk appetite. Business risk shall primarily be controlled by
following up performance levels in relation to set goals and
reporting by the first line of defence of early warning signs in
the risk appetite measures of lending growth, market share
and funding cost. Net profit and capital will also be reviewed
continuously within the framework of the financial reporting.
Equity
The Company’s Board of Directors has determined that the
Company’s capital base shall cover the Company’s internally
estimated capital requirements or the regulatory capital
requirement, whichever is highest, by a margin. This margin
takes into account a number of uncertainty factors that may
adversely affect the Company’s capital relations, such as
stronger growth in lending than forecast. The scale of the
capital target in quantitative terms is determined annually
within the framework of the Company’s internal capital and
liquidity assessment (ICLA).
Capital management
The Company must retain sufficient capital to be able to meet
both internally estimated capital requirements and regulatory
requirements. Sufficient capital adequacy is important for
lending to Sweden’s municipalities and regions to be able
to continue growing and to maintain the confidence of the
Company’s stakeholders, particularly investors. Kommuninvest
is required to comply with the Supervisory Regulation (EU)
No. 575/2013, also known as the CRR (Capital Requirements
Regulation), which is directly applicable in Sweden and the
Capital Adequacy Directive EU 2013/36, which is implemented
Sweden through legislation and regulations issued by
Finansinspektionen. Finansinspektionen can also provide Pillar
II guidance specifying a level of capital it believes the institution
should maintain in addition to the requirement. Separate
requirements and guidelines are stated regarding risk-based
capital requirements and leverage ratio capital requirements.
The Pillar II guidance is based on the outcome of stress tests
and other institution-specific assessments. On 24 September
2021, Finansinspektionen announced its decision regarding
the risk-based Pillar II requirements and Pillar II guidance
that are applicable to the Company and that are based on
Finansinspektionen’s review and evaluation process, see
Note 3. According to Finansinspektionen’s decision, the
Company does not need to hold capital for Pillar II guidance.
Kommuninvest’s capitalisation – responsibility of the owners
The Society is responsible for the Group’s capitalisation.
Kommuninvest is not capitalised through retained earnings,
but by means of member contributions from the members of
the Society, who are also the Company’s owners. The Annual
General Meeting of the Society adopts a new capital plan
once per term of office, that is, every four years. At the Annual
General Meeting of the Society in March 2024, a new plan
for Kommuninvest’s build-up of capital for 2025–2028 was
adopted.
Capitalisation 2024
Over the year, the Society’s members increased the
participation capital in the Society by SEK 867 million. In
October, the Society acquired shares in the Company for SEK
870 million, at a premium of 120 percent. Consequently, the
share capital in the Company increased by SEK 725 million and
unrestricted equity increased by SEK 145 million.
Capital plan and internal capital assessment
The Group’s capital planning is integrated with the Company’s
strategic operational planning and internal capital and
liquidity assessment (ICLA). The plans look five years ahead
and the capital requirements of the Company and the Group
are analysed in the process, based on forecasted growth,
operational changes affecting capital and future regulatory
requirements. The objective of this capital planning is to
ensure that the capital base in the Company and the Group
is large enough to bear the risks and regulatory requirements
stemming from the implementation of the Business Plan. The
forecasts are based on the Company’s base scenario. Stress
tests are also performed to determine the scale of the capital
buffers that the Company needs to also be able to cope with
deviations from the plan. The internal capital assessment
identifies all significant risks within the Group and the capital
requirements for these risks are evaluated and quantified.
The internal capital evaluation is compiled in a report that
is submitted to the Swedish Financial Supervisory Authority
on request. As per the end of the year, the internal capital
assessment shows that the Company meets all regulatory
capital requirements, as well as internal capital targets, see
Note 3.
Leverage ratio
Since 28 June 2021, the capital requirement measure leverage
ratio is applied within the EU. The leverage ratio has been set
at 3 percent and will be directly applicable to Kommuninvest
via the Capital Adequacy Regulation (EU) 2019/876 of 20
May 2019. The leverage ratio is defined as the ratio between
Tier I capital and total exposure in assets and commitments. A
specific leverage ratio regulation is applied when calculating
the leverage ratio for Public Development Credit Institutions
(PDCI), the category to which Kommuninvest belongs. For
Kommuninvest, this means that all lending to members and
their companies can be deducted from the exposure measure
applied in calculating the leverage ratio of the Company.
KOMMUNINVEST ANNUAL REPORT 2024 38
BOARD OF DIRECTORS’ REPORT | RISK AND CAPITAL MANAGEMENT
LIQUIDITY AND FUNDING
Liquidity risks shall primarily be managed through the
Company’s internal capital and liquidity assessment (ICLA) and
the Company’s Capital and Liquidity Policy and associated
documents. The management of refinancing risks is explained
in the Company’s internal rules on capital and liquidity. Liquidity
and refinancing risks shall be controlled continuously, based
on set risk appetites and limits. The purpose of the Company’s
liquidity operations is to meet known and forecast liquidity
needs. Liquidity preparedness shall also be favourable, both
under normal market conditions and during periods of stressed
liquidity. Liquidity management is designed to safeguard the
Company’s capacity to meet all of its payment commitments on
time, without significant additional expenses, and to ensure that
liquidity is sufficient to be able to extend existing loans. This is
met through a highly liquid liquidity reserve and a high degree
of diversification among funding sources regarding the number
and types of counterparties, financial instrument categories,
maturities, currencies and geographical markets.
CREDIT AND MARKET
Credit and counterparty risks are continuously followed up by
monitoring counterparties and through business intelligence.
Exposures are measured on an ongoing basis against risk
appetites and limits. The local government sector and
counterparties are also followed up, based on forward-looking
analyses, sensitivity analyses and stress tests. The Company
only applies standardised methods for assessing capital
adequacy in credit and counterparty risks. With only lending to
the municipal and regional sectors being permitted and strict
demands on counterparties’ creditworthiness being applied,
risks can be kept at a very low level. Accordingly, the Company
has not suffered any historical credit losses. Interest rate
and credit spread risks are to be calculated and followed up
regularly. Currency risk shall be calculated and followed up on
a monthly basis. Assessment and validation of the Company’s
market risk calculations shall occur regularly and at least
annually. This includes an overview of the assumptions applied
in the calculations.
OPERATIONAL RISKS
The Company works continuously to identify, assess, manage,
follow up and report the operational risks to which the
Company is exposed. All significant processes in the Company
shall have a process owner. Rules regarding processes and
process owners are included in the Company’s rules regarding
internal governance and control. At least annually, the Company
conducts a self-assessment of the net operational risks in the
operations. Further information on the Company’s management
of operational risks is provided in Note 3.
KOMMUNINVEST ANNUAL REPORT 2024 39
Development Committee
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
Together with the Society and Kommuninvest Fastighets AB,
the Company forms a financial group of companies – the
Kommuninvest Group (the Group). Since the Company issues
debt instruments that are listed for trading in a regulated
market, the Company is legally bound to present a corporate
governance report. Since the Company’s shares are not
traded on a regulated market in Sweden, it is not bound by
the Swedish Code of Corporate Governance. In the Company’s
assessment, the principles for the governance of companies
owned by municipalities and regions, prepared by the local
government sector, should not be applied given the financial
focus of the operations.
REGULATORY FRAMEWORK FOR CORPORATE GOVERNANCE
The Companies Act includes basic regulations for the
organisation of companies. These include the requirement for
a Board of Directors appointed by an Annual General Meeting.
In turn, the Board of Directors appoints a Chairman, who is to
lead the work of the Board, and a President, who is responsible
for ongoing management in accordance with the Board of
Directors’ guidelines and instructions. In Kommuninvest’s
case, both Board Members and the Chairman of the Board are
appointed by the Annual General Meeting. The Annual General
Meeting shall also appoint an auditor to monitor operations and
check the accounts. As a credit market company, the Company
shall adhere to the Banking and Financing Business Act and the
general advice and regulations issued by the Swedish Financial
Supervisory Authority (Finansinspektionen) and its equivalents
within the European Union, the ESAs (European Supervisory
Authorities).
Focus on governance and control
Annual General Meeting
of the Society
Board of Directors
KOMMUNINVEST COOPERATIVE SOCIETY
President and CEO
Asset Liability
Committee (ALCO)
Executive
Management Team
Regulatory Committee
KOMMUNINVEST I SVERIGE AB
Head of
Compliance
Lay auditors
CRO
Internal
auditor
Nomination
committees
Internal
auditor
External
auditor
Responsibility for appointments
Reporting paths
Credit Committee
Continuity and
Crisis Committee
Members/owners
Annual General Meeting
Board of Directors
Kommuninvest i Sverige AB is a Swedish public limited liability company and a wholly-owned subsidiary of the
Kommuninvest Cooperative Society. Good governance and control are crucial to the Company as it is owned by
Swedish municipalities and regions, with a public mandate.
External
auditor
KOMMUNINVEST ANNUAL REPORT 2024 40
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
PRINCIPLES OF CORPORATE GOVERNANCE
The Society is a cooperative venture with the principal purpose
of providing members and their majority-owned companies
access to cost-efficient and stable loan financing. The members
of the Society consist of Swedish municipalities and regions.
According to its Articles of Association, the Society shall not
be operated with the purpose of generating profit. Once
consolidation needs have been satisfied, all surpluses shall
accrue to the members. The members themselves determine
the focus of the operations and no individual member has any
decisive influence in isolation. At the Annual General Meeting of
the Society, each member has one vote.
Presented below are some of the principles on which corporate
governance is based. Additional to these are the formal work
plan for the Board of Directors, the instructions to the President
and other internal regulations adopted by the Board of
Directors.
OWNER DIRECTIVES FROM THE ANNUAL GENERAL MEETING OF THE
SOCIETY
The Board of Directors of the Society develops owner
directives for the Company and these are set annually at the
Annual General Meeting. The owner directives set out the
framework of the operations assigned to the Board of Directors
of the Company by the Society. The owner directives include
guidelines regarding consolidation, risk levels, remuneration
principles, principles for business travel and representation,
expertise on funding matters, development of products and
services and any special assignments set for the Company by
the Society.
TARGETS FOR OPERATIONS
The Company’s overarching objective is to generate the
greatest possible benefit for the members of the Society.
Routes towards this could involve maintaining a high proportion
of satisfied customers, accounting for a large proportion of
members’ loan financing, maintaining a high level of cost
efficiency and having the financial strength to support the long-
term focus of the operations.
REMUNERATION PRINCIPLES
The Board of Directors sets the remuneration principles
applicable within the Company. The principles are also
reviewed regularly. The Company is not deemed to require
a specific Remunerations Committee. These duties are
performed instead by the Chairman of the Board.
Remunerations shall engender conditions to attract, retain and
motivate employees so that operations can be conducted in
an optimal manner. The basic principle is that remunerations
and other terms of employment shall be market-based without
being the leader in terms of salary. The Company does not
apply variable remunerations but only fixed cash salary, with
the exception of severance pay. In 2024, severance pay was
paid in one (one) instance, in connection with termination of
employment. Wages are set taking into consideration the
tasks involved and their degree of difficulty, responsibilities,
educational requirements and how the employee fulfils
the demands imposed and contributes to improvements in
operations.
AUDIT COMMITTEE
Within the Company, the tasks of an Audit Committee are
performed by the full Board of Directors. In 2024, the Audit
Committee met on five occasions. Agenda items included the
2023 Annual Report, a risk review of the 2023 annual accounts,
the External Audit’s annual report, ICLA 2024–2028, approval
of non-audit services, Internal Audit reports, the Internal Audit’s
annual plans for 2024 and 2025, the 2024 interim financial
statements, the External Audit’s review report and annual plan,
as well as valuation and hedge accounting.
SHAREHOLDERS AND ANNUAL GENERAL MEETING
The Society owns all of the shares in the Company and exerts
its influence at the Annual General Meeting. The Annual General
Meeting of the Company was held in Stockholm on 21 March
2024, in direct connection with the Annual General Meeting of
the Society and with an option for remote attendance.
The Annual General Meeting of the Company approved the
2023 Annual Report proposed by the Board of Directors and
the President, and discharged the members of the Board of
Directors and the President from responsibility. Furthermore,
the Annual General Meeting approved the distribution of
earnings proposed by the Board of Directors and the President.
The Chairman and all ordinary members were elected by
the Annual General Meeting. No one from the Executive
Management Team of the Company sits on the Board of
Directors.
The Annual General Meeting also made decisions on the
following matters:
• Adoption of owner directives.
• Determination of a formal work plan for the Election
Committee.
• Authorisation for the Board of Directors to implement new
share issues during the financial year.
ELECTION COMMITTEES
There is an Election Committee for the Society’s companies:
Kommuninvest i Sverige AB and Kommuninvest Fastighets
AB. The Election Committee bears the ultimate responsibility
for the preparation of appointment decisions through a
structured and transparent process allowing the shareholder
to give its views on proposals and to submit its own proposals
regarding appointments and associated issues, thereby
establishing favourable conditions for well-founded decisions.
In accordance with the Election Committee’s instructions, the
composition of the Board of Directors shall reflect the nature,
scope and complexity of the operations. At least one member
shall be, or have been, an elected representative in a member
municipality or region and possess a knowledge of the local
government sector and the political process.
MORE INFORMATION REGARDING KOMMUNINVEST’S CORPORATE GOVERNANCE
The following information can be accessed via Kommuninvest’s website
www.kommuninvest.se:
• The Articles of Association of the Kommuninvest Cooperative Society.
• Details of members and approval of new members.
• Articles of Association for Kommuninvest i Sverige AB.
• Information on the work of the Election Committees.
KOMMUNINVEST ANNUAL REPORT 2024 41
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
An annual suitability assessment of the Board Members
is conducted individually and collectively as part of the
preparations for the Annual General Meeting and the process
of appointing members. The Members are considered suitable
and to have sufficient expertise, skills and experience to fulfil
their assignments.
The Election Committee of the companies owned by the
Society shall represent the Board of Directors of the Society
and consists of members elected by the Board from its own
membership. The Board of Directors of the Society has resolved
that its Working Committee shall act as the Election Committee.
BOARD OF DIRECTORS OF KOMMUNINVEST I SVERIGE AB
The Board of Directors of the Company bears the ultimate
responsibility for its organisation and management. Each year,
the Board of Directors establishes a formal work plan that,
among other things, regulates the Board’s tasks, reporting to
the Board, the number of Board meetings and their regular
agenda, as well as the assessment of the work of the Board of
Directors and President.
Furthermore, the Board sets objectives and strategies for
operations, is responsible for identifying and managing risks,
and ensures that operations are conducted in compliance with
the pre-determined objectives. The Board is also tasked with
preparing internal guidelines including a reporting policy that
states what reports are to be produced within the Company.
The full Board is responsible for completing the tasks otherwise
assigned to an Audit Committee. The rules of procedure are
reviewed and adopted at least once a year.
CHAIRMAN OF THE BOARD
The Chairman of the Board is responsible for the work of
the Board of Directors being well organised and efficiently
conducted and for ensuring that the Board otherwise fulfils
its duties. Among other things, the Chairman is required to
encourage an open and constructive discussion among the
Board, to ensure that the Board continuously updates and
deepens its knowledge of the Company and its operations, to
ensure that the Board has rules for identifying and dealing with
conflicts of interest on the Board, and for receiving comments
from the Parent Society and disseminating these within the
Board. The Chairman of the Board shall also check that the
Board’s decisions are implemented efficiently, ensure that the
work of the Board is evaluated annually, and act as a discussion
partner and support for the President of the Company.
The Chairman of the Board is also responsible for ensuring that
the Company’s remuneration policy and remuneration systems
are independently reviewed and for monitoring the application
of the rules.
PRESIDENT AND CEO
The Board of Directors has adopted a set of instructions for
the President and CEO, detailing his tasks and responsibilities.
The CEO is to deal with the ongoing administration of the
Company in accordance with the Board’s guidelines. Among
other things, this includes assuming responsibility for proposals
being prepared for an operations plan, a budget and an Interim
and Annual Report. The CEO is also responsible for ensuring
that appropriate systems and procedures are in place for
reporting to the Board of Directors of both the Company’s
economic situation and financial position, as well as other
matters of importance for the work of the Board. It is also the
CEO’s responsibility that the Board be informed of regulatory
amendments, the content of audit reports, any reports from
the Swedish Financial Supervisory Authority and any other
significant matters.
BOARD MEMBERS
As per 31 December 2024, the Company’s Board of Directors
consisted of Erik Langby (Chairman), Lars Heikensten, Kristina
Sundin Jonsson, Catrina Ingelstam, Mats Filipsson, Rickard
Simonsson and Anette Henriksson, as well as employee
representatives Mattias Bokenblom and Kristin Ekblad. The
members are presented on pages 42–43.
REMUNERATIONS
For 2024, the Annual General Meeting approved a fixed fee of
TSEK 600 (600) for the Chairman of the Board. For the other
Board Members, a fixed fee of TSEK 330 (330) was set.
The total fees paid to the members of the Board of Directors
for 2024 amounted to TSEK 2,580 (2,580). No fees were paid to
employee representatives. The combined fees are detailed in
the table on the next page.
ELECTION COMMITTEE OF THE COMPANIES OWNED BY THE SOCIETY 2024/2025
Linda Frohm (M), Municipality of Kalix, Chairman
Ulf Olsson (S), City of Borås, Deputy Chairman
Ewa-May Karlsson (C), Region Västerbotten
Niclas Nilsson (SD), Municipality of Kristianstad
Pierre Sjöström (S), Municipality of Staffanstorp
More information regarding the Election Committee is available on
www.kommuninvest.se
WORK OF THE BOARD OF DIRECTORS IN 2024
In 2024, the Board of Directors held seven (seven) ordinary meetings, one (one)
extraordinary meetings and one (one) inaugural meeting. In addition to ongoing
matters, agendas and decisions have involved:
• Internal capital and liquidity assessment
• Risk framework and other internal governance documents
• Recovery plan
• Remuneration issues
• Updates of funding programmes
• Credit report
• Limit decision
• Employee survey
• Valuation principles
• Data security
• Strategic operations plan and budget
• Customer survey
• Joint risk analysis – internal audit, risk and regulatory compliance
• Governance for sustainable financing programmes
• Annual Report and interim reports
KOMMUNINVEST ANNUAL REPORT 2024 42
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
Board of Directors of Kommuninvest i
Sverige AB
ERIK LANGBY
Consultant and entrepreneur
Born: 1951
Elected: Chairman since 2023.
Member since 2015.
Education: Stockholm University.
Previous positions: Chairman of
the Municipal Executive Board
and Municipal Commissioner
in Nacka, Chairman of the
Association of Local Government
Authorities in Stockholm
County, Board Member SALAR,
Chairman of the Regional
Planning Board in the county
council, Board Member Atrium
Ljungberg AB, Board Member
Hegeli Public Affairs AB,
Chairman of Healthcare and
Welfare Committee of Norrtälje,
Board Member HSB Omsorg AB,
Chairman Texab AB, Chairman
AB Solom, Board Member
Dagens Samhälle AB, Chairman
of Structural partnership
of Stockholm, Chairman
NackaStrandsmässan AB.
Other assignments: CEO
Jordnära Samhällsansvar
AB, Deputy Chairman SALAR
International AB, Chairman
AB SigtunaHem, Chairman
Bostadsrätterna i Sverige
Ekonomisk Förening, Chairman
Sigtuna Bostadsförmedling
AB, Chairman Tegelhatt AB,
Chairman Municipal Council,
Municipality of Sigtuna.
MATS FILIPSSON
Board member and consultant
Born: 1958
Elected: Member since 2021.
Education: Degree of Bachelor
of Business in Administration
and Economics, Stockholm
University.
Previous positions: Debt
Manager Swedish National Debt
Office, Under Secretary Ministry
of Finance, Technical Assistance
Advisor International Monetary
Fund, Chief Risk Officer Swedish
National Debt Office, Senior
Financial Officer World Bank.
Other assignments: Board
Member, Olle Enkvist
Foundation.
LARS HEIKENSTEN
Chairman Fiscal Policy Council
Born: 1950
Elected: Member since 2016.
Education: PhD Economics
Stockholm School of
Economics, Honorary Doctor
Umeå University and Gustavus
Adolphus College (USA).
Previous positions: CEO Nobel
Foundation, Member of the
European Court of Auditors,
Governor of the Riksbank, Board
Member, Bank of International
Settlement (BIS) and the ECB’s
general council, Chief Economist
at Handelsbanken and Financial
and head of the finance
department at the Swedish
Ministry of Finance.
Other assignments: Chairman
of the Board Trygg-Stiftelsen,
Board Member Stiftelsen
Skansen, Board Member Save
the Children Sweden, Member
Royal Swedish Academy of
Engineering Sciences, Member
Royal Swedish Academy of
Sciences.
ANETTE HENRIKSSON
Board member and consultant
Born: 1961
Elected: Member since 2021.
Education: Bachelor of Science
in Public Administration, Lund
University.
Previous positions: CEO Locum
AB, Head of Asset Management
Property and Services
Committee Region Stockholm,
CEO Municipality of Lund,
Deputy CEO Akademiska Hus,
CFO Region Halland.
Other assignments: Deputy
Board Member Länghult Media
AB.
CATRINA INGELSTAM
Proprietary consulting
operations Creatme AB
Born: 1961
Elected: Member since 2020.
Education: Master of Science
in Business and Economics,
Stockholm University.
Previous positions: CFO Dina
Försäkringar, CFO Folksam-
gruppen, Product Manager AMF
Pension, Administrative Manager
AMF Fonder, Department
Manager Fond&Finans PPM,
Business Area Manager Share
trading SkandiaBanken,
Authorised Public Accountant
EY, Board Member Spiltan
Fonder AB, Board Member
Sparbanken Sjuhärad AB, Board
Member KPA Pension and a
number of other positions/board
assignments in the finance
sector.
Other assignments: Chairman
SH Pension (occupational
pensions association), Chairman
Sjätte AP Fonden (sixth AP
fund), Board Member Swedfund
International AB, Board Member
Sparbanken Rekarne AB, Board
Member Löf (the regional
authorities’ mutual insurance
company).
REMUNERATION AND ATTENDANCE – BOARD OF DIRECTORS OF KOMMUNINVEST I SVERIGE AB (PUBL)
Name Position of dependence
Attendance, Board meetings
2024
Remuneration 2024,
SEK
Remuneration 2023,
SEK
Erik Langby Independent
9 of 9 600.000 532.500
Mats Filipsson Independent
9 of 9 330.000 330.000
Lars Heikensten Independent 9 of 9 330.000 330.000
Anette Henriksson Independent 8 of 9 330.000 330.000
Catrina Ingelstam Independent 9 of 9 330.000 330.000
Rickard Simonsson Independent 8 of 9 330.000 247.500
Kristina Sundin Jonsson Independent 9 of 9 330.000 330.000
Ellen Bramness Arvidsson Independent, stepped down in March 2023 - - 150.000
Mattias Bokenblom Employee representative 9 of 9 Not remunerated Not remunerated
Kristin Ekblad Employee representative
9 of 9 Not remunerated Not remunerated
KOMMUNINVEST ANNUAL REPORT 2024 43
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
Board of Directors of Kommuninvest i
Sverige AB
MATTIAS BOKENBLOM
Employee representative
Born: 1973
Elected: Member since 2019.
Education: Licentiate degree in
Economics, Örebro University.
Position at Kommuninvest:
Senior Analyst.
KRISTIN EKBLAD
Employee representative
Born: 1975
Elected: Member since 2020.
Education: PhD in Economics,
Örebro University.
Position at Kommuninvest:
Business architect.
RICKARD SIMONSSON
Regional Director, Region
Örebro, CEO Region Örebro läns
förvaltnings AB
Born: 1968
Elected: Member since 2023.
Education: Master of Politics,
Administrative Economics,
Gothenburg University
Previous positions: County
Council Director, Örebro Region
Council, Peter Welin, Örebro
Region Council, Chief Analyst,
Kommuninvest i Sverige AB,
Board Member Inera AB, Board
Member Adda AB.
Other assignments: Board
Member Örebro University.
KRISTINA SUNDIN JONSSON
Chief Administrator, Municipality
of Skellefteå, President
Skellefteå Stadshus AB
Born: 1967
Elected: Member since 2018.
Education: BA in Business
Science, Umeå University.
Previous positions: Authorised
Public Accountant, Consultant
KPMG AB, Financial Manager
Skellefteåbostäder AB, Expert
Advisor to the 112 Inquiry, Expert
Advisor to the Government
Inquiry on Pilot Projects in
Municipalities and Regions,
Chairman of the Swedish
Association of Municipal
Directors, Board Member
Inera AB, Board Member LTU
Business AB, Board Member LTU
Holding AB.
Other assignments: Board
Member Adda Inköpscentral AB,
Member of the Mistra Research
Programme Mistra Carbon
Exit, Delegate Västerbotten
Regional Equality Delegation,
Member of the Västerbotten
County Administrative Board’s
Transparency Council, Member
of the Agency for Digital
Government’s (DIGG) advisory
body.
AUDITORS IN KOMMUNINVEST I SVERIGE AB
The Annual General Meeting of the Kommuninvest Cooperative Society elects the external auditors. According to the
Articles of Association, Kommuninvest shall have one auditor. The external auditor is appointed by the Annual General
Meeting on the basis of a proposal from the Board of Directors’ Audit Committee, for the period extending until the end of
the ordinary Annual General Meeting held in the fourth financial year following the auditor’s election. The Annual General
Meeting is also entitled to appoint a deputy auditor.
The same auditing company appointed as external auditor for the Society is also the appointed external auditor for the
Company and Kommuninvest Fastighets AB. The purpose is to obtain more efficient auditing for the Group.
EXTERNAL AUDITOR
At the Society’s 2024 Annual General Meeting, EY AB was appointed as the auditing company for the period extending
until the end of the 2028 Annual General Meeting. EY AB has selected authorised public accountant Mona Alfredsson as
Chief Auditor. The chief auditor meets with the Board of Directors of the Company at least twice a year, and the Board of
Directors of the Society at least once a year.
INTERNAL AUDITOR
As of 2024, the Society has appointed KPMG as the internal auditing company for the Company and the Society.
LAY AUDITORS
The 2020 Annual General Meeting of the Society resolved that the assignment of the lay auditors should focus solely on
reviewing the Society and its operations.
KOMMUNINVEST ANNUAL REPORT 2024 44
BOARD OF DIRECTORS’ REPORT | CORPORATE GOVERNANCE REPORT
Executive Management Team
KATARINA LJUNGQVIST,
PRESIDENT AND CEO
Born: 1965
Education: School of Business,
Economics and Law, University of
Gothenburg.
Previous positions: Handels-
banken: Digital Manager, Head of
Business Development, Head of
Regional Bank Western Sweden,
Office Manager, Credit Manager.
Other assignments: Board
Member of AB Svensk
Exportkredit, Hufvudstaden AB
and of Stiftelsen Svenska Mässan
and its Council of Principals.
Member of the election committee
for the West Sweden Chamber of
Commerce.
MARIA VIIMNE, DEPUTY CEO
Born: 1970
Education: Mälardalen University,
B.A. Economics. Stockholm
University, Master of Laws.
University of Rotterdam and
University of Hamburg. European
Master in Law & Economics.
Previous positions: Finance Group
Director and Company Counsel at
Kommuninvest, among others.
EXECUTIVE MANAGEMENT TEAM, KOMMUNINVEST I SVERIGE AB
The President and CEO of the Company leads, organises and
develops the business in such a way that objectives set by the
Board of Directors are achieved. Written instructions stipulate
the division of labour between the Board of Directors and the
President and CEO.
The President is responsible for keeping the Board of Directors
continuously informed of changes to regulatory structures,
the content of risk, compliance and audit reports and other
significant events. The CEO’s tasks include providing the Board
of Directors with the necessary information and materials on
which to base decisions.
The President and CEO is supported by the Executive
Management Team. On 31 December 2024, in addition to the
President and CEO, the Company’s executive management
consisted of Maria Viimne (Deputy CEO and Head of IT and
Development), Patrick Nimander (CFO), Malin Waldenström
(Head of Human Resources), Jonas Berglund (CRO), Galit
Saar (Head of Legal and Procurement), Victoria Preger (Head
of Communications), David Ljung (Chief Lending and Advice
Officer) and Britt Kerkenberg (Chief Compliance Officer).
During the year, a reorganisation was implemented, with Maria
Viimne being appointed as IT and Development Manager.
The Executive Management Team has been expanded with a
Compliance Officer.
REMUNERATIONS – EXECUTIVE MANAGEMENT TEAM, KOMMUNINVEST I SVERIGE AB (PUBL)
Name Year Basic salary Benefits Variable pay Pension expense Total, SEK
Katarina Ljungqvist, President and CEO (appointed April
2023)
2024 4,161,339 108,360 - 1,506,539 5,776,238
2023 2,970,223 171 - 672,451 3,642,845
Tomas Werngren, President and CEO (retired March 2023) 2024 - - - - -
2023 908,983 29,148 - 306,937 1,245,068
Maria Viimne , Deputy CEO 2024 2,328,981 57 - 761,881 3,090,919
2023 2,266,296 113 - 734,092 3,000,501
Other Executive Management Team 2024 11,152,326 23,373 - 3,230,019 14,405,718
2023 9,154,202 12,750 - 2,400,274 11,567,226
Employees who have a material impact on the Company’s
risk profile
1
2024 4 544,802 6,047 - 1,319,876 5,870,725
2023 4,368,820 10,200 - 1,677,415 6,056,435
1) In addition to the Board of Directors and Executive Management. This Group comprises 6 (4) employees with the following positions: Head of Debt Management, Head of Accounting and Reporting, Head of
Back Office, Chief Lending Officer, Credit Manager and Chief Advice Officer.
KOMMUNINVEST ANNUAL REPORT 2024 45
BOARD OF DIRECTORS’ REPORT | INTERNAL CONTROL WITH REGARD TO THE FINANCIAL OPERATIONS
OPERATIONAL PROCESSES
An efficient process for internal governance and control requires
clearly defined business processes. For Kommuninvest,
operational processes are defined as the recurring and
interconnected activities that apply data and resources to
satisfy the needs of members and customers. Processes
are divided into governing processes, business processes
and supporting processes. The Company has identified the
key processes: Managing Funding, Managing Lending and
Managing Finances.
The governing processes serve to support decisions regarding
the Company’s goals, strategies, rules and limits, and carrying
out planning, management, improvement and review of the
organisation’s other processes. Supporting processes within
the Company serve to sustain core processes, either directly or
indirectly, to ensure that they function as well as possible.
TARGETS AND STRATEGIES
The operations’ long-term targets and strategies are formulated
in Strategy 2027 and, in preparation for each new year, this
strategy is translated into a Business Plan. In line with the
strategic course that has been set, initiatives are prioritised
and implemented within the framework of the Business Plan
targeting the operational objectives.
RISK MANAGEMENT
The Company conducts ongoing assessments of the risks
that may arise in connection with the Company’s operations.
The valuation of the identified risks is based on an overall
assessment of the probability of the risk occurring and the
financial impact that the event may have on Kommuninvest.
See more in the section Risk and capital management.
CONTROL ENVIRONMENT
The control environment is detailed in the documents
explaining the principles of internal control, with the most
important being:
• Internal Governance and Control Policy
• Capital and Liquidity Policy
• Credit Policy
• Risk policy
• Board of Directors’ Instructions for Control Functions
The Company’s organisation also forms part of the control
environment and is divided into three lines:
Board of Directors’ report on internal control
with regard to the financial operations
KOMMUNINVEST’S OPERATIONAL PROCESSES
Satisfied
customer
Customer
needs
Managing liquidity
Payment and
settlement
Managing lending
Support processes
Control processes
External requirements
Kommuninvest’s process for internal governance and control is based on the targets set for the operations having
been designed to ensure appropriate organisation and effective management, risk awareness, reliable financial
reporting, a good capacity to comply with external and internal regulations and on the Company developing the
quality and efficiency of its operations in line with demand from its owners and customers.
KOMMUNINVEST ANNUAL REPORT 2024 46
BOARD OF DIRECTORS’ REPORT | INTERNAL CONTROL WITH REGARD TO THE FINANCIAL OPERATIONS
VISION / BUSINESS CONCEPT
Reporting
Mission and
strategy
Risk
management
ControlInformation
Follow-up
KOMMUNINVEST’S CONTROL ACTIVITIES
President
1ST LINE OF DEFENCE
• Operations
• Support functions
2ND LINE OF DEFENCE
• Risk and Control
• Office support
3RD LINE OF DEFENCE
• Internal Audit
EXTERNAL
• External audit
Board of Directors
Owners
Reporting
Directives
Independent
1. The first line
comprises all functions that do not constitute control functions.
These functions are responsible for conducting the day-to-
day work of the operations and bear full responsibility for the
business operations and for addressing the risks arising therein.
2. The second line
comprises two control functions, the Risk Department and the
Compliance Department. The second line supports the first line
with expertise in its respective areas, and provides advice to the
first line. It shall also monitor and challenge the work of the first
line on risk-related matters.
3. The third line
comprises the Internal Audit, an independent review function
that reports to the Board of Directors. The Internal Audit
is responsible for the assessment of the governance risk
management and control processes.
INFORMATION AND COMMUNICATION
The Company has an internal website where policies,
instructions and other governance documents are made
available. The objective is for all governing documents to
be updated at least once annually. The internal website
also provides other important information concerning the
operations, including operational reports.
MONITORING AND REPORTING
The Board of Directors continuously monitors the Company’s
financial performance based on monthly reports including
budgeted amounts and actual outcomes with associated
comments. The Board of Directors continuously evaluates
the information submitted by management and the control
functions. This monitoring ensures, among other things,
that action is taken to rectify any deficiencies, and that the
proposed measures emerging from the annual assessment and
internal and external audits are taken into account. In addition,
management, the Internal Audit and the Risk, Control and
Compliance departments perform regular checks and audits.
Risk and Control reviews the annual accounts process each
year.
Financial
statements
KOMMUNINVEST ANNUAL REPORT 2024 48
FINANCIAL STATEMENTS
Income statement 49
Statement of comprehensive income 49
Comments on the income statement 50
Balance sheet 51
Comments on the balance sheet 52
Statement of changes in equity 53
Comments on the statement of changes in equity 54
Cash flow statement 55
NOTES
Note 1 Information about Kommuninvest i Sverige AB 56
Note 2 Accounting principles 56
Note 3 Risk and capital management 60
Note 4 Net interest income 77
Note 5 Commission expenses 77
Note 6 Net result of financial transactions 78
Note 7 Other operating income 78
Note 8 General administration expenses 78
Note 9 Other operating expenses 81
Note 10 Net credit losses 81
Note 11 Fees imposed: Risk tax and resolution fee 81
Note 12 Tax 81
Note 13 Proposed distribution of earnings 81
Note 14 Sovereign bonds eligible as collateral 82
Note 15 Lending 82
Note 16 Bonds and other interest-bearing securities 82
Note 17 Shares and participations in subsidiaries 83
Note 18 Derivatives and hedge accounting 83
Note 19 Intangible assets 85
Note 20 Tangible assets 85
Note 21 Other assets 85
Note 22 Other liabilities 85
Note 23 Provisions 85
Note 24 Pledged assets, contingent liabilities and commitments 85
Note 25 Related party relationships 86
Note 26 Financial assets and liabilities 86
Note 27 Information on financial assets and liabilities subject to netting 91
Note 28 Events after the balance sheet date 92
Five-Year Summary 93
Alternative performance measurements 94
Signatures 95
Audit Report 96
KOMMUNINVEST ANNUAL REPORT 2024 49
FINANCIAL STATEMENTS | INCOME STATEMENT
Income statement
1 January – 31 December
SEK, million Note 2024 2023
Interest revenues calculated according to effective interest method 23,550.2 20,482.6
Other interest revenues 198.3 361.2
Interest expenses calculated according to effective interest method -22,528.8 -19,474.8
Other interest expenses -197.3 -378.6
NET INTEREST INCOME 4 1,022.5 990.5
Dividends received 2.1 3.0
Commission expenses 5 -13.9 -13.1
Net result of financial transactions 6 286.0 47.6
of which, derecognised assets valued at amortised cost - -0.1
Other operating income 7 16.2 14.9
TOTAL OPERATING INCOME 1,312.9 1,042.8
General administration expenses 8 -305.1 -242.7
Depreciation and impairment of intangible assets 19 -6.1 -6.2
Depreciation and impairment of material assets 20 -1.6 -2.0
Other operating expenses 9 -3.5 -2.6
TOTAL EXPENSES -316.3 -253.5
PROFIT BEFORE CREDIT LOSSES 996.5 789.3
Net credit losses 10 0.1 2.8
Fees imposed: Risk tax and resolution fee 11 -358.2 -343.0
OPERATING PROFIT 638.4 449.2
Tax 12 -133.3 -94.0
NET PROFIT 13 505.1 355.2
Statement of comprehensive income
1 January – 31 December
SEK, million Note 2024 2023
NET PROFIT 505.1 355.2
Other comprehensive income - -
TOTAL COMPREHENSIVE INCOME 505.1 355.2
KOMMUNINVEST ANNUAL REPORT 2024 50
FINANCIAL STATEMENTS | INCOME STATEMENT
Comments on the income statement
NET INTEREST INCOME
Net interest income increased by SEK 32 million, corresponding
to 3.2 percent, amounting to SEK 1,022.5 (990.5) million. The
increased lending volume of SEK 33 billion contributed to the
higher net interest income. In the second half of 2024, the
Riksbank’s (Swedish central bank) key rate and related market
interest rates declined, pushing net interest income down
slightly as the Company has more interest-bearing financial
assets than corresponding financial liabilities. A major part of the
assets also comprises the Company’s liquidity reserve, which is
invested at low risk, giving a lower return than other assets.
Expenses for ratings, the Swedish Benchmark Programme
and other fees associated with funding burdened net interest
income by SEK 58.5 (42.5) million. The increase is related to
increased expenses for the Swedish Benchmark Programme.
For further information regarding net interest income for the
period, see Note 4.
NET RESULT OF FINANCIAL TRANSACTIONS
The net result of financial transactions amounted to SEK 286.0
(47.6) million. The result is mainly explained by unrealised
changes in market value of SEK 281.6 (59.3) million. The
difference in value between the Company’s assets and liabilities
valued at fair value decreased over the year, giving a positive
profit effect from unrealised changes in market value. Since
Kommuninvest intends to hold its assets and liabilities to
maturity, these values are not normally realised.
For further information, see Note 6.
OTHER OPERATING INCOME
License revenue for the Company’s services within KI Finans
increased by SEK 1.2 million to SEK 11.8 (10.6) million.
EXPENSES
Operating expenses amounted to SEK 316.4 (253.5) million, of
which payroll expenses accounted for SEK 150.1 (137.9) million
and other operating expenses totalled SEK 166.2 (115.6) million.
The increase in payroll expenses is explained by the full-year
effects of filling previous vacancies and of reinforcing resources
for the development efforts being conducted to transform the
Company’s IT support.
The increase in other expenses is also explained by the
development work, in the form of increased expenses of SEK 35
million for external resources and higher IT expenses regarding
licenses for new business systems. Depreciation remained at
the same level as in the preceding year.
Credit losses amounted to SEK 0.1 (2.8) million.
The Company’s risk tax amounted to SEK 334.7 (325.9) million.
The reason for the higher level is that the basis of the tax
calculation, the Company’s total liabilities, increased compared
with the preceding year. Kommuninvest’s resolution fee for
2024 has been set by the Swedish National Debt Office at SEK
23.5 (17.1) million.
The Company’s wholly-owned subsidiary, Kommuninvest
Fastighets AB, generated a group contribution of SEK 2.1 (3.0)
million. The Board of Directors of the property company was of
the opinion that the Group contribution would not prevent the
property company from fulfilling its obligations in the short and
long term, nor from making necessary investments.
NET PROFIT
Kommuninvest’s operating profit, its profit before tax, amounted
to SEK 638.4 (449.2) million. The higher net profit is mainly
explained by unrealised changes in market value of SEK 281.6
(59.3) million.
Kommuninvest’s operating income, defined as operating
profit less changes in market value, expected credit losses
and risk tax amounted to SEK 691.4 (713.0) million. For further
information, see Alternative performance measurements.
The tax expense for the year, recognised in profit or loss,
amounted to a negative SEK 133.3 (94.0) million, for more
information regarding reported tax, see Note 12.
Profit after tax amounted to SEK 505.1 (355.2) million.
Payroll expenses
Other administration expenses
Resolution fee/risk tax
OPERATING PROFIT/LOSS BEFORE TAX
SEK, million
DISTRIBUTION OF EXPENSES
SEK, million Basis points
Depreciation
Other operating expenses
Management expenses, excl.
resolution fee/risk tax, in
percentage points of lending
KOMMUNINVEST ANNUAL REPORT 2024 51
FINANCIAL STATEMENTS | BALANCE SHEET
Balance sheet
SEK, million Note 2024 2023
ASSETS
Cash and balances with central banks 3 6,575.8 4,722.7
Sovereign bonds eligible as collateral 3.14 34,541.6 31,481.4
Lending to credit institutions
3
712.6 401.9
Lending
3.15
544,428.3 508,802.2
Bonds and other interest-bearing securities
3.16
17,065.1 9,916.4
Shares and participations in subsidiaries 17 42.0 42.0
Derivatives 3,18,27 9,951.5 7,822.8
Change in value of interest-hedged item in portfolio hedging -217.1 -
Intangible fixed assets 19 6.1 12.3
Tangible assets
20
5.1 4.6
Current tax assets - 7.2
Other assets 21 155.6 5,663.7
Prepaid expenses and accrued revenues 48.4 33.9
TOTAL ASSETS 613,315.0 568,911.1
LIABILITIES, PROVISIONS AND EQUITY
Liabilities and provisions
Liabilities to credit institutions
3 2,433.9 821.1
Securities issued 3 588,475.7 543,532.3
Derivatives 3,18,27 307.0 5,961.3
Change in value of interest-hedged item in portfolio hedging
- 987.2
Other liabilities 22 10,102.0 6,496.0
Accrued expenses and prepaid revenues 79.7 57.7
Provisions 23 0.0 0.0
Total liabilities and provisions 601,398.3 557,855.6
Equity
Restricted equity
Share capital 10,900.0 10,175.0
Development expenditure reserve 6.1 12.3
Statutory reserve 17.5 17.5
Unrestricted equity
Unrestricted share premium reserve 540.0 395.0
Profit or loss brought forward -52.0 100.5
Net profit for the period 13 505.1 355.2
Total equity 11,916.7 11,055.5
TOTAL LIABILITIES, PROVISIONS AND EQUITY 613,315.0 568,911.1
KOMMUNINVEST ANNUAL REPORT 2024 52
FINANCIAL STATEMENTS | BALANCE SHEET
ASSETS
At the end of the period, Kommuninvest’s total assets
amounted to SEK 613,315.0 (568,911.1) million. Lending, which
constitutes the bulk of the assets, amounted to SEK 545,151.4
(511,851.3) million in nominal terms, an increase of SEK 33,300.1
million or 6.5 (6.1) percent.
The liquidity reserve, consisting of the balance sheet items
Cash and balances with central banks, Sovereign bonds eligible
as collateral, Lending to credit institutions and Bonds and other
interest-bearing securities, increased to SEK 58,895.1 (46,522.4)
million.
Pledged assets for derivative liabilities, which are included
under the item Other assets, decreased to SEK 133.2 (5,625.9)
million. For more information on other assets, see Note 21.
Derivative assets (derivatives with positive market value)
increased to SEK 9,951.5 (7,822.8) million.
LIABILITIES
The Company’s liabilities amounted to SEK 601,398.3
(557,855.6) million. Funding, in the form of securities issued,
increased over the year to SEK 589,438.9 (550,733.9) million in
nominal terms, a increase of SEK 38,705.0 million or 7.0 percent.
Derivative liabilities (derivatives with negative market value)
amounted to SEK 307.0 (5,961.3) million.
The balance sheet item Other liabilities amounted to SEK
10,102.0 (6,496.0) million. Other liabilities include collateral
received for derivative liabilities of SEK 9,204.7 (5,583.0) million.
Further information on other liabilities can be found in Note 22.
Collateral pledged and received for derivatives cleared by
central clearing counterparties is netted per counterparty and
currency in the balance sheet, see further under Note 27. There
being no right to offset cash collateral pledged and received for
derivatives not cleared by a central clearing counterparty, this is
reported gross in the Balance Sheet.
Comments on the balance sheet
Lending
Total assets
Equity
BALANCE SHEET
SEK, bn
KOMMUNINVEST ANNUAL REPORT 2024 53
FINANCIAL STATEMENTS | STATEMENT OF CHANGES IN EQUITY
Statement of changes in equity
Restricted equity Unrestricted equity Total equity
SEK, million
Share
capital
New share
issue in
progress
Development
expenditure reserve
1
Statutory
reserve
2
Unrestricted
share
premium
reserve
Profit or loss
brought forward Net profit
Equity brought forward 1 Jan 2023 9,475.0 - 18.5 17.5 255.0 444.8 -42.1 10,168.8
Net profit 355.2 355.2
Change in development expenditure reserve
for the year -6.2 6.2 -
Other comprehensive income -
Total comprehensive income - - -6.2 - - 6.2 355.2 355.2
Transactions with shareholders
Appropriation of surplus -42.1 42.1 -
New share issue 700.0 140.0 840.0
-
Group contributions -388.4 -388.4
Tax effect on Group contribution 80.0 80.0
Total transactions with shareholders 700.0 - - - 140.0 -350.5 42.1 531.6
Equity carried forward 31 Dec 2023 10,175.0 - 12.3 17.5 395.0 100.5 355.2 11,055.5
Equity brought forward 1 Jan 2024 10,175.0 - 12.3 17.5 395.0 100.5 355.2 11,055.5
Net profit 505.1 505.1
Change in development expenditure reserve
for the year -6.2 6.2 -
Other comprehensive income -
Total comprehensive income - - -6.1 - - 6.2 505.1 505.1
Transactions with shareholders -
Appropriation of surplus 355.2 -355.2 -
New share issue 725.0 145.0 870.0
New share issue in progress -
Group contributions -647.2 -647.2
Tax effect on Group contribution 133.3 133.3
Total transactions with shareholders 725.0 - - - 145.0 -158.7 -355.2 356.1
Equity carried forward 31 Dec 2023 10,900.0 - 6.1 17.5 540.0 -52.0 505.1 11,916.7
1) The development expenditure reserve corresponds to capitalised development expenses accrued in-house that have been transferred from profit or loss brought forward,
adjusted for a proportionate share of the depreciation reversed from the reserve to unrestricted equity.
2) The statutory reserve refers to previous statutory provisions to restricted equity. The requirement was abolished on 1 January 2006 and prior provisions remain.
KOMMUNINVEST ANNUAL REPORT 2024 54
FINANCIAL STATEMENTS | STATEMENT OF CHANGES IN EQUITY
EQUITY
At the end of the year, equity in the Company amounted to SEK
11,916.7 (11,055.5) million, following group contributions of SEK
647.2 (388.4) million to the Kommuninvest Cooperative Society.
At the end of the year, share capital amounted to SEK
10,900.0 (10,175.0) million, distributed between 109,000,000
(101,750,000) shares. The increase in share capital comprises
a new share issue for SEK 725.0 (700.0) million. In accordance
with the Society’s capital plan, the issue was implemented at a
premium of 120 percent. This entailed an increase in the share
premium reserve of SEK 145.0 (140.0) million to SEK 540.0
(395.0) million.
The total share capital is attributable to the members of the
Society and no shares are available for trade.
Comments on the statement of changes in
equity
EQUITY 5 YEARS
SEK, million
14,000.0
12,000.0
10,000.0
8,000.0
6,000.0
4,000.0
2,000.0
0.0
KOMMUNINVEST ANNUAL REPORT 2024 55
FINANCIAL STATEMENTS | CASH FLOW STATEMENT
Cash flow statement
SEK, million 2024 2023
Operational activities
Operating profit 638.4 449.2
Adjustment for items not included in cash flow -276.5 -50.9
Income tax paid 7.2 -3.6
Cash flow from operational activities before changes in the assets and liabilities of the operational activities 369.1 394.7
Change in liquidity portfolio -10,155.8 -3,886.1
Change in lending -33,166.8 -30,263.4
Change in other assets 5,493.7 -4,975.1
Change in other liabilities 3,228.8 -8,981.5
Cash flow from operational activities -34,231.1 -47,711.4
Investment activities
Acquisitions of intangible assets - -
Acquisitions of tangible assets -2.2 -2.3
Divestments of tangible assets - 0.3
Cash flow from investment activities -2.2 -2.0
Financing activities
Issue of interest-bearing securities 228,770.4 207,445.8
Maturity and repurchases of interest-bearing securities -192,995.3 -183,473.4
New share issue 870.0 840.0
Change in debt ratios in relation to the Parent Company -248.0 44.0
Cash flow from financing activities 36,397.1 24,856.4
Cash flow for the year 2,163.8 -22,856.9
Cash and cash equivalents at start of the year 5,124.8 27,981.7
Cash and cash equivalents at end of the year 7,288.6 5,124.8
Cash and cash equivalents consists in their entirety of cash and balances with central banks, as well as loans to credit institutions that, at the time of acquisition,
have a maturity of at most three months and that are exposed to insignificant risk of fluctuations in value.
Adjustment for items not included in cash flow
Depreciation 7.8 8.2
Profit from divestments of tangible assets 0.0 –0.2
Exchange rate changes from change in financial assets -2.6 3.2
Unrealised changes in market value -281.6 -59.3
Net credit losses -0.1 -2.8
Total -276.5 -50.9
Interest paid and received, included in the cash flow
Interest received
1
21,824.5 17,561.3
Interest paid
2
-15,522.8 -16,450.4
1) Reported as interest received are payments that have been paid and received for the Company’s loans and investments, as well as the payments paid and received for derivative contracts used to hedge the
Company’s loans and investments.
2) Reported as paid interest are payments that have been paid and received for the Company’s funding, as well as payments paid and received for derivative contracts used to hedge the Company’s funding.
RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES
2024 Opening balance Cash flows
Currency exchange
fluctuations
Change in
fair value
Group
contributions CLOSING BALANCE
Funding, incl. derivatives 542,491.9 35,775.1 -2.6 3,000.7 - 581,265.1
Share capital incl. share premium
reserve 10,570.0 870.0 - - - 11,440.0
Inter-company liability 447.0 -248.0 - - 647.2 846.2
Total 553,508.9 36,397.1 -2.6 3,000.7 647.2 593,551.3
KOMMUNINVEST ANNUAL REPORT 2024 56
FINANCIAL STATEMENTS | NOTES
Notes
All amounts are given in millions of SEK unless otherwise stated.
NOTE 1 INFORMATION ABOUT KOMMUNINVEST I SVERIGE AB
This Annual Report applies to the year ending 31 December
2024 and relates to Kommuninvest i Sverige AB (publ),
registered number: SE556281–4409. Kommuninvest has its
registered office in Örebro. Kommuninvest’s address is: P.O. Box
124, SE-701 42 Örebro, Sweden.
The Parent Company of Kommuninvest i Sverige AB is the
Kommuninvest Cooperative Society, registration number
716453–2074.
The Annual Report was approved for publication by the Board
of Directors on 12 February 2025. The income statement and
balance sheet will be subject to ratification at the Annual
General Meeting on 3 April 2025.
NOTE 2 ACCOUNTING PRINCIPLES
Compliance with standards and legislation
The Kommuninvest Annual Report has been prepared
in accordance with the Swedish Annual Accounts Act for
Credit Institutions and Securities Companies (ÅRKL), and the
Swedish Financial Supervisory Authority’s (Finansinspektionen)
regulations and general recommendations regarding annual
accounts for credit institutions and securities companies
(FFFS 2008:25) including all applicable amending regulations.
Consequently all International Financial Reporting Standards
and interpretations endorsed by the EU are followed as far
as possible, within the provisions of ÅRKL and considering
the additions and exemptions specified in FFFS 2008:25.
Furthermore, the recommendations from the Swedish Financial
Reporting Board, Accounting for legal entities (RFR 2) have
been applied. In accordance with Chapter 7, section 6a of
ÅRKL, Kommuninvest has chosen not to prepare consolidated
accounts.
The accounting principles are in line with those applied in
the 2023 Annual Report, with the exception of amendments
caused by new or amended IFRS standards coming into effect
during 2024.
CONSOLIDATED ACCOUNTS
Since 1 January 2012, Kommuninvest i Sverige AB owns
Kommuninvest Fastighets AB, which means that Kommuninvest
i Sverige AB is now a group with Kommuninvest i Sverige AB
as the parent company and Kommuninvest Fastighets AB as
its subsidiary. The operations of Kommuninvest Fastighets
AB consist entirely of owning and managing the building in
which Kommuninvest i Sverige AB conducts is operations.
In accordance with Section 7:6a of ÅRKL, Kommuninvest i
Sverige AB will not prepare consolidated accounts since its
subsidiary is of limited significance in presenting a fair portrayal
of position and earnings. For further details, see Note 17. The
Group’s Annual Report is prepared by the Parent Society, the
Kommuninvest Cooperative Society, and will be published on 3
April 2025 at www.kommuninvest.se.
NEW AND AMENDED STANDARDS AND INTERPRETATIONS
No new or amended laws, standards and interpretations
introduced during the year have had any material effect
on Kommuninvest’s earnings, position, disclosure, capital
requirements, capital base or major exposures.
NEW AND AMENDED STANDARDS AND INTERPRETATIONS YET TO COME
INTO EFFECT
IFRS 18 Presentation and Disclosure in Financial Statements
On 9 April 2024, the IASB published the new standard IFRS 18
Presentation and Disclosure in Financial Statements, replacing
IAS 1 Presentation of Financial Statements. Given that IFRS 18 is
adopted by the EU, and that the introduction date proposed by
the IASB remains unchanged, the standard will be applied as
of the 2027 financial year. IFRS 18 introduces new requirements
regarding the presentation of financial statements and their
disclosures, focusing particularly on the income statement and
disclosures concerning management’s performance measures.
The standard is not expected to entail any financial effects
for Kommuninvest as IFRS 18 focuses on the presentation
of the financial statements and the appurtenant disclosures.
Kommuninvest will initiate a process to analyse the effects of
the new standard.
IFRS 9 Financial instruments and IFRS 7 Financial
instruments: disclosure
On 30 May, the IASB issued amendments to IFRS 9 Financial
instruments and IFRS 7 Financial Instruments: Disclosures
that are to be applied as of 1 January 2026, with premature
application permitted pending approval by the EU.
Kommuninvest will initiate a process to analyse the effects of
the amendments to the standards.
Other amendments to IFRS
None of the other upcoming amendments to the accounting
regulations issued for application are deemed to have a
significant impact on Kommuninvest’s financial statements,
capital adequacy, major exposures or other conditions in
accordance with applicable operating rules.
SIGNIFICANT JUDGEMENTS AND ASSUMPTIONS
The preparation of the Annual Report includes judgements and
assumptions that affect the accounting and supplementary
disclosures. The most important judgements when applying
accounting principles concern how financial instruments are
classified and assessed, as explained below in the section
Financial instruments.
For assets and liabilities valued at fair value, their value is
affected by the assessment of whether the available market
prices can be considered to be based on an active market.
When determining the fair value of financial instruments
not traded in an active market, Kommuninvest applies
valuation techniques and then makes assumptions that may
be associated with uncertainty. Note 26 describes how fair
value for financial instruments is derived including significant
assumptions, uncertainty factors and sensitivity analyses. The
report has been prepared based on amortised cost, with the
KOMMUNINVEST ANNUAL REPORT 2024 57
FINANCIAL STATEMENTS | NOTES
NOTE 2 CONT.
exception of a significant portion of the Company’s financial
assets and liabilities, which are measured at fair value in cases
of accounting mismatches or at amortised cost adjusted for
fair value with regard to risks subject to hedge accounting. For
further information, see section Financial instruments and Note
26.
With regard to Kommuninvest’s business model for financial
assets, this has been assessed as being to hold these to
maturity. During the year, the purpose of the business model
did not change and the assessment is that the business
model has both been complied with during the year and that
its purpose of receiving contractual cash flows remains. The
assessment has been included that the purpose of holding
the assets was unchanged, as well as an evaluation of the
year’s sales. For more information on the net result of financial
transactions, see Note 6.
Kommuninvest calculates expected credit losses in accordance
with IFRS 9 on financial assets valued at amortised cost. The
calculation of expected credit losses includes application of
forward-looking scenarios and assumptions. Accordingly, the
method for determining expected credit losses is associated
with uncertainty. Note 3 describes the methods chosen and
their assumptions.
FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY
Kommuninvest’s functional currency is the Swedish krona
(SEK) and the financial statements are presented in the same
currency. All amounts are rounded off to the nearest million
unless otherwise stated.
TRANSACTIONS IN FOREIGN CURRENCIES
Transactions in foreign currencies are translated into the
functional currency at the exchange rate in force on the
transaction date. Monetary assets and liabilities in foreign
currencies are translated into the functional currency at the
exchange rate in force on the balance sheet date. Exchange
rate changes arising from the conversions are recognised in the
income statement.
INTEREST REVENUES AND INTEREST EXPENSES
Interest revenues and interest expenses presented in the
income statement comprise:
• Interest on financial assets and liabilities measured at
amortised cost.
• Interest from financial assets classified as available-for-sale
measured at fair value through the income statement.
• Interest on derivatives that are hedging instruments and for
which hedge accounting is applied.
Interest revenues and interest expenses on lending,
interest-bearing securities, Liabilities to credit institutions
and derivatives are calculated and reported by applying
the effective interest method. Where applicable, interest
revenue and interest expenses include periodised amounts
of transaction expenses. Interest revenues consist of interest
revenue from loans and investments, as well as interest
revenues and interest expenses from derivatives hedging loans
and investments.
In accordance with the effective interest method, interest
expenses consist of interest expenses on funding, as well
as interest revenues and interest expenses from derivatives
hedging funding. Kommuninvest has granted lending at
negative interest rates, these negative interest revenues being
reported as interest expenses.
Other interest revenues and other interest expenses include
interest on collateral pledged and received, as well as
operating expenses for rating and funding programmes. For
more information on interest revenues and interest expense,
see Note 4.
COMMISSION EXPENSES
Commission expenses consist of expenses for services
received such as deposit fees, payment agency commissions
and securities brokerage.
NET RESULT OF FINANCIAL TRANSACTIONS
Net result of financial transactions’ encompasses the realised
and unrealised changes in value arising from financial
transactions. The net result of financial transactions comprises:
• Unrealised changes in the fair value on assets and liabilities
recognised at fair value through the income statement,
divided between Held for trade, Compulsory or through
application of the Fair value option.
• Unrealised changes in fair value on derivatives where hedge
accounting of fair value is applied.
• Unrealised changes in fair value on hedged items with regard
to hedged risk in hedging of fair value.
• Capital gain/loss from divestment of financial assets and
liabilities.
• Exchange rate changes.
FINANCIAL INSTRUMENTS
Financial instruments recognised in the asset side of the
balance sheet include lending, lending to credit institutions,
interest-bearing securities, derivatives and other financial
assets. Liabilities and equity include liabilities to credit
institutions, issued securities, derivatives and other financial
liabilities. For further information, see Note 26.
Recognition in and removal from the balance sheet
A financial asset or financial liability is recognised in the balance
sheet when Kommuninvest becomes party to the instrument’s
contractual terms.
A financial asset is removed from the balance sheet when
the contractual rights to cash flows from that financial asset
cease or on the transfer of the financial asset, upon which
Kommuninvest, in all material regards, transfers to another
all of the risks and benefits associated with ownership of the
financial asset. A financial liability is removed from the balance
sheet once the obligation in the contract has been fulfilled or is
in some other way extinguished. The same applies for part of a
financial liability.
Financial assets and financial liabilities are netted and
recognised at a net amount in the balance sheet only where
there is a legal right to net the amounts and it is intended to
adjust the items with a net amount or to at the same time
capitalise the asset and adjust the liability. Derivatives cleared
with a central clearing counterparty are reported net per
counterparty and currency in the balance sheet. Acquisitions
and sales of financial instruments are reported on the business
day, i.e. the day the Company commits to acquiring or selling
the instrument.
KOMMUNINVEST ANNUAL REPORT 2024 58
FINANCIAL STATEMENTS | NOTES
NOTE 2 CONT.
Financial instruments are initially measured at their fair value
with transaction expenses taken into account, the exception
being assets and liabilities included in the category of financial
assets and liabilities measured at fair value through the income
statement, which are measured at fair value without taking
transaction expenses into account.
Classification and measurement of financial instruments
Financial assets are classified on the basis of the Company’s
business model. The business model is identified at the
portfolio level and reflects how the portfolio’s financial assets
are managed together to achieve a specific business objective.
Possible business models for financial assets are:
• Hold to maturity.
• Hold to maturity and sell.
• Hold for trade or evaluate on a fair value basis.
Kommuninvest’s financial assets are divided into three
portfolios: lending portfolio, liquidity portfolio and other. All
portfolios are deemed to have the same business objectives,
to receive contractual cash flows, and the business model is
to hold to maturity. To ensure that cash flows consist only of
capital amounts and interest on principal, SPPI tests are carried
out continuously on the Company’s new assets. As per 31
December 2024, Kommuninvest had no assets that had failed
the SPPI test. The classification of the business model and the
outcome of the SPPI test affects the Company’s valuation of
financial assets.
Financial instruments can be valued according to the
categories:
• Amortised cost.
• Fair value through other comprehensive income.
• Fair value through the income statement, divided between
Held for trade, Compulsory or Fair value option
Where there is an accounting mismatch, financial liabilities are
recognised at fair value through the income statement – in
other instances, these are recognised at amortised cost.
Amortised cost
When the business model for financial assets is to hold these
to maturity and cash flows consist solely of capital amounts
and interest on principal, that is, they pass the SPPI test,
the financial assets shall be valued at amortised cost. This
means that Kommuninvest’s valuation of financial assets is
based on amortised cost since the business model for all of
Kommuninvest’s assets is to hold to maturity and all assets are
deemed to have cash flows consisting only of capital amounts
and interest on principal.
Fair value through other comprehensive income
Since Kommuninvest’s business model is not to both hold to
maturity and sell, it has no financial instruments in the valuation
category Fair value through other comprehensive income.
Fair value through the income statement
The valuation category Fair value through the income
statement is divided between Held for trade, Compulsory and
Fair value option.
Kommuninvest’s derivatives that are held for financial hedging,
but not included in hedge accounting, are reported under the
valuation category Held for trade for liability derivatives and
Compulsory for asset derivatives.
If Kommuninvest has a financial asset that fails the SPPI test,
the instrument is valued in the category Compulsory fair value
through the income statement.
Kommuninvest applies the Fair value option where accounting
mismatches have been identified. Accounting mismatches
occur when an instrument is hedged with one or more
derivative contracts to minimise market risks without applying
hedge accounting. As derivatives are valued at fair value
through the income statement but not the hedged item,
accounting mismatches occur. When this is the case, the
financially hedged item is also valued at fair value through
the income statement through the Fair value option. This
would result in accounting mismatches if the derivative were
measured at fair value through the income statement but not
the hedged item.
Financial liabilities in the category Fair value through the
income statement refer primarily to funding at fixed interest and
structured funding, that is, loans that are subject to cancellation
and/or that have coupon payments that are variable, but not
connected to the interbank rate.
The reason for fixed-rate funding being identified in this
category is that such funding is hedged financially with a
derivative without applying hedge accounting. It would result in
accounting mismatches if the derivative were measured at fair
value through the income statement but not the funding.
The reason for classifying structured funding in this category is
that the funding includes material embedded derivatives and
that it significantly reduces inconsistencies in the valuation of
free-standing derivatives and funding.
Hedge accounting
Kommuninvest applies IAS 39 (the EU carve-out version) with
regard to hedge accounting.
To obtain a true and fair picture of the operation, Kommuninvest
applies, where possible, hedge accounting of fair value for the
assets and liabilities which have been hedged with one or more
financial instruments. The hedged risk is the risk of fluctuations
in fair value as a consequence of changes in the interest on
swaps.
Any inefficiency is recognised in the income statement. If a
hedging relationship does not fulfil the efficiency requirements,
the relationship is severed and the asset/liability is recognised
at amortised cost and the accumulated change in value
of the asset/liability is allocated over the remaining term.
Kommuninvest’s hedging relationships have been deemed
efficient.
Transaction-matched hedging
The hedged item, consisting of fixed-interest funding, fixed-
interest investments or fixed-interest lending, is assessed on
the basis of changes in fair value in terms of the hedged risk.
Kommuninvest uses interest rate and currency swaps as hedge
instruments. The change in value of the hedged risk is reported
on the same line in the balance sheet as the hedged item.
Both the change in value of the hedged item and the hedging
instrument are recognised in the income statement under Net
result of financial transactions.
Portfolio hedging
The hedged item derives from a fixed-interest lending portfolio
based on maturity date. The hedged item is revalued at fair
value, taking the hedged risk into account. The value of the
hedged risk is reported on a separate line in the balance
KOMMUNINVEST ANNUAL REPORT 2024 59
FINANCIAL STATEMENTS | NOTES
NOTE 2 CONT.
sheet as Change in value of interest-hedged items in portfolio
hedging. As a hedging instruments, Kommuninvest uses
interest rate swaps whose terms are in agreement with the
hedged item. Both the change in value of the hedged item
and the hedging instrument are recognised in the income
statement under Net result of financial transactions.
CREDIT LOSSES AND IMPAIRMENT OF FINANCIAL INSTRUMENTS
Kommuninvest calculates expected credit losses in accordance
with IFRS 9. Loss provisions are also made for off-balance sheet
commitments, which for Kommuninvest consist of committed
undisbursed loans, liquidity guarantees and building loans.
Kommuninvest has no realised credit losses.
The special status of the local government authorities in the
Swedish constitution and their right to levy taxes mean that
municipalities and regions cannot be declared bankrupt.
Neither can they cease to exist in any other way. Moreover, it is
forbidden to pledge local government property as security for a
loan, which means that municipalities and regions are liable for
all obligations they enter into, with all their tax power and their
total assets.
Changes in expected credit losses are reported in the income
statement under the item Net credit losses. Expected credit
losses are reported in the balance sheet as an impairment of
the recognised value of assets which, according to IFRS 9, are
subject to impairment. Loss provisions on off-balance sheet
items are reported as provisions in the balance sheet. For
information on credit losses and the calculation model, see
Note 3 and for the effect earnings of credit losses, see Note 10.
GENERAL ADMINISTRATION EXPENSES
General administration expenses include payroll expenses,
including salaries and emoluments, pension expenses, payroll
taxes and other social security contributions and temporary/
contract personnel, training expenses and other payroll
expenses. Other expenses included in administrative expenses
are expenses for consultants, premises, IT, travel, rating, market
data and other. For further information, see Note 8.
FEES IMPOSED: RISK TAX AND RESOLUTION FEE
In addition to the resolution fee, the risk tax, introduced as of 1
January 2022, is included in accordance with the Act on Risk
Tax for Credit Institutions
TAX
Tax on net profit includes current and deferred tax. Income
taxes are recognised in the income statement, except when
the underlying transaction is recognised directly against other
comprehensive income or equity, whereby the appurtenant
tax effect is also recognised in other comprehensive income or
equity.
Current taxes are taxes that must be paid for the current year.
This also includes adjustments to current taxes attributable to
previous periods.
Deferred tax is calculated on the basis of temporary differences
between reported and tax values of assets and liabilities
according to the balance sheet approach.
GROUP CONTRIBUTIONS
Kommuninvest recognises Group contributions paid to the
parent company directly against equity. Group contributions
received are reported in the income statement under dividends
received.
CASH FLOW STATEMENT
The cash flow statement has been prepared using the indirect
method. The cash flow statement has been divided into inward
and outward payments from operational activities, investment
activities and financing activities. Operating activities mainly
include changes in the lending and liquidity portfolio.
Investing activities encompass investments in tangible and
intangible assets. The financing activities shows the issue and
redemption/repurchase of securities issued. Kommuninvest
applies the exemption rule in IAS7:23 and reports issues of less
than three months net. The financing activities also include a
new share issue and change in consolidated debt.
SEGMENT REPORTING
Kommuninvest does not prepare segment reports since it
has only one segment: lending to members. All operations
are conducted in Sweden and all customers are domiciled in
Sweden. Kommuninvest has no single customer who accounts
for 10 percent or more of income.
KOMMUNINVEST ANNUAL REPORT 2024 60
FINANCIAL STATEMENTS | NOTES
NOTE 3 RISK AND CAPITAL MANAGEMENT
Kommuninvest’s principal assignment is to ensure access to
stable and efficient funding for the local government sector.
This entails borrowing funds on the financial market, based on
customers’ needs. The operating model entails the Company
being exposed to risks. The Company’s targets, principles
and methods for managing these risks, and the methods for
measuring those risks, are presented below (see also the
section Risk and capital management for a comprehensive
description of the Company’s risk profile and risk organisation
and the separate Risk and Capital Management Report, which
is available at www.kommuninvest.se). Also shown under each
area of risk are the current exposure and estimated capital
requirement.
NET PROFIT AND CAPITAL
Strategic risk and business risk
Strategic risk refers to the risk that, due to losses or other
balance sheet effects, the Company has insufficient capital
to conduct and develop its operations in accordance with
established plans. Business risk refers to the risk that, due to
prices, trust issues, efficiency or other factors, the Company
not is not competitive in the market and therefore gradually
losing volumes and profitability. The risk is that net profit fails
to meet targets for continued development, dividend targets
and capital requirements. Risks involving net profit and capital
are to be addressed primarily through the Company’s internal
capital and liquidity assessment (ICLA). The internal rules for
this are set out in the Capital and Liquidity Policy and related
documents. Net profit and capital will also be reviewed
within the framework of the financial reporting. Lending
terms, including price differentiation, that foster conditions
for managing business risks are addressed in the Company’s
internal Credit Policy.
Capital requirements for strategic risk and business risk
The Company’s assessment is that the capital requirement for
strategic and business risk is addressed by the buffer set by the
Company’s Board of Directors.
Capital adequacy
The capital adequacy requirements are calculated in
accordance with the Supervisory Regulation (EU) No.
575/2013, also known as the CRR (Capital Requirements
Regulation), which is directly applicable in Sweden and the
Capital Adequacy Directive EU 2013/36, which is implemented
in Sweden through legislation and regulations issued by
Finansinspektionen. On 28 September 2022, the Swedish
Financial Supervisory Authority (Finansinspektionen) decided
to increase the buffer value to 1.0 percent, applicable as of 29
September 2023.
Capital base 2024 2023
Capital Instruments
1
10,900.0 10,175.0
Retained earnings 999.2 863.0
Accumulated other comprehensive income and other
reserves 17.5 17.5
Core Tier I capital before
regulatory adjustments 11,916.7 11,055.5
Further value adjustments -284.7 -286.1
Intangible assets -6.1 -12.3
Total regulatory adjustments to core Tier I capital -290.8 -298.4
Total core Tier I capital 11,625.9 10,757.1
Tier I capital contributions – –
Total Tier I capital 11,625.9 10,757.1
Total Tier II capital – –
Total capital 11,625.9 10,757.1
1) For a more detailed description of the instruments included, see the section Statement of changes
in equity.
Risk exposure amounts and minimum capital amounts 2024 2023
Capital requirement, Pillar I
Risk
exposure
Capital
requirement,
percent
Capital
requirement
Risk
exposure
Capital
requirement,
percent
Capital
requirement
Capital requirement for credit risks (the standardised method) 247.8 8% 19.8 177.4 8% 14.2
of which, institutional exposures 142.7 8% 11.4 80.3 8% 6.4
of which, corporate exposures 105.1 8% 8.4 97.0 8% 7.8
Operational risks, basic indicator method 1,759.3 8% 140.7 1,394.5 8% 111.6
Credit valuation adjustment 1,433.6 8% 114.7 1,459.1 8% 116.7
Total risk exposure amount and minimum capital amount 3,440.7 275.2 3,031.0 242.5
KOMMUNINVEST ANNUAL REPORT 2024 61
FINANCIAL STATEMENTS | NOTES
Capital adequacy ratios 2024 2023
Core Tier I capital ratio 337.9% 354.9%
Tier I capital ratio 337.9% 354.9%
Total capital ratio 337.9% 354.9%
Specific capital base requirements for
risks other than insufficient leverage
ratio
1
2024 2023
Additional capital base requirements,
core Tier I capital 42.1% 1,447.5 42.1% 1,275.1
Additional capital base requirements,
Tier I capital 14.0% 482.5 14.0% 424.9
Additional capital base requirements,
Tier II capital 18.7% 643.3 18.7% 566.8
Total specific capital base
requirements for risks other than
insufficient leverage ratio 74.8% 2,573.3 74.8% 2,266.9
1) In accordance with the Swedish Financial Supervisory Authority’s (Finansinspektionen) decision of 24
September 2021, in connection with the review and assessment process and addressing specific
capital base requirements, liquidity requirements and Pillar II guidance.
Combined buffer requirement 2024 2023
Capital conservation buffer 2.5% 86.0 2.5% 75.8
Countercyclical buffer 2.0% 68.8 2.0% 60.6
Systemic risk buffer - - - -
Total buffer requirements 4.5% 154.8 4.5% 136.4
Core Tier I capital available for use as
buffer 255.1% 8,777.3 272.1% 8,247.8
Total risk-based capital base
requirement 2024 2023
Capital base requirement, Pillar I 8.0% 275.3 8.0% 242.5
Capital base requirement, Pillar II
requirement
1
74.8% 2,573.3 74.8% 2,266.9
Combined buffer requirement 4.5% 154.8 4.5% 136.4
Pillar II guidance
1
- - - -
Total assessed capital base
requirement 87.3% 3,003.4 87.3% 2,645.7
1) In accordance with the Swedish Financial Supervisory Authority’s (Finansinspektionen) decision of 24
September 2021, in connection with the review and assessment process and addressing specific
capital base requirements, liquidity requirements and Pillar II guidance.
For other information to be provided in accordance with section
8 of the CRR and the Swedish Financial Supervisory Authority’s
(Finansinspektionen) regulations and general advice on annual
accounts for credit institutions and securities companies, FFFS
2008:25, see Kommuninvest’s website.
Leverage ratio
2024 2023
Total assets 613,315.0 568,911.1
Less asset amounts deducted to determine the
core Tier I capital -290.8 -251.6
Adjustment for derivative instruments -4,118.1 -6,522.3
Deduction in the form of exposure to members
and their companies -544,428.3 -508,802.2
Plus possible change in risk in connection with
repo transactions - 0.5
Total exposure 64,477.8 53,335.4
Tier 1 capital, calculated applying transitional
rules 11,625.9 10,757.1
Leverage ratio 18.0% 20.2%
Leverage ratio, capital base
requirements 2024 2023
Capital base requirement, Pillar I 3.0% 1,934.3 3.0% 1,600.1
Capital base requirement, Pillar II
requirement
1
- - - -
Pillar II guidance
1
- - - -
Total assessed capital base
requirement 3.0% 1,934.3 3.0% 1,600.1
1) In accordance with the Swedish Financial Supervisory Authority’s (Finansinspektionen) decision of 24
September 2021, in connection with the review and assessment process and addressing specific
capital base requirements, liquidity requirements and Pillar II guidance.
Internally estimated capital requirements
The difference between the Company’s internal assessment
and Finansinspektionen’s capital base requirements and Pillar
II guidance, mainly comprises the capital requirement for
insufficient leverage ratio. In the Company’s assessment, the
capital requirement for the risk of insufficient leverage ratio is
equivalent to the difference between a leverage ratio of 0.7 and
other risk-adjusted capital requirements, including the buffers
in Pillars I and II. In Finansinspektionen’s assessment, the Pillar
II guidance on leverage ratio should be met at the Group level
and not at the individual Company level.
Internally estimated capital requirements 2024 2023
Capital requirement, Pillar II
Credit risk 21.6 30.0
Market risks 1785.0 1554.0
Capital planning buffer 401.0 280.6
Total internally assessed capital requirement
(Pillar II), excluding the risk of insufficient
leverage ratio 2,207.6 1,864.6
Internally assessed capital requirement for the
risk of insufficient leverage ratio 1626.1 1695.5
Total internally assessed capital requirement
(Pillar II) 3,833.7 3,560.1
NOTE 3 CONT.
KOMMUNINVEST ANNUAL REPORT 2024 62
FINANCIAL STATEMENTS | NOTES
Kommuninvest’s internal capital assessment forms the basis
for the internally assessed capital requirement. For more
information on the Company’s internal capital assessment
and capital plan, see the preceding section Risk and capital
management in Kommuninvest’s Board of Directors’ Report.
Capital targets
The Company’s capital target for 2024 amounts to SEK 7,500
(7,200) million, corresponding to a 1.0 percent leverage ratio
plus the Board of Directors’ buffer of SEK 1,100 (1,200) million. In
relation to the Company’s capital base, which amounts to SEK
11,625.9 (10,757.1) million, the capital target is met by a good
margin. The aim of Kommuninvest’s capital planning is for all
operations to be adequately capitalised to meet both current
and future regulatory requirements. For more information
regarding the Company’s internal capital assessment and
capital plan, see the preceding section Risk and capital
management; for details regarding capital targets, see the table
below.
Capital targets 2024 2023
Internally estimated capital requirements 4,500 4,200
Estimated capital requirement (for the Group)
according to Finansinspektionen 6,400 6,000
Board of Directors’ buffer 1,100 1,200
Capital targets 7,500 7,200
Member responsibilities
Municipalities and region that are members of the Kommun-
invest Cooperative Society have entered a joint and several
guarantee covering all of the Company’s commitments.
Kommuninvest’s operations have changed considerably
since the inception of the Company in 1986. In 2010, two
agreements were prepared in addition to the basic joint and
several guarantee to clarify the responsibility of the members.
One is a guarantee agreement regulating the responsibility
for counterparty exposures in derivatives and replaces
earlier clauses in the documentation of loans. The other is
an updated regress agreement that details the members’
mutual responsibility. The agreements clarify and replace the
earlier responsibility according to the regress agreement and
promissory note terms. The agreements were adopted by the
member authorities individually during 2011. The distribution
of responsibility has been communicated twice annually to
members by means of a statement of undertaking based on
each member’s proportional participation in Kommuninvest’s
total lending and each member’s share of the total contribution
capital paid to the Kommuninvest Cooperative Society. The
statement of undertaking is based on the following items in
Kommuninvest’s balance sheet as per 31 December 2024 (in
SEK, millions). In the statement of undertaking, the derivatives
are recognised net per counterparty, that is, claims against
the same counterparty have been netted against liabilities to
the same counterparty. In addition, the derivatives recognised
above as assets or liabilities have been reduced by pledged
assets and collateral received, such as government securities.
At 31 December 2024, collateral received amounted to SEK
54.4 (119.0) million and may only be used to cover outstanding
exposures. The corresponding collateral for the Company’s
liabilities relating to derivatives amounts to SEK 0.0 (0.0) million.
These are disclosed in Note 27, but may not be reduced in the
balance sheet.
2024
Liabilities to credit institutions 2,433.9
Securities issued 588,475.7
Total funding 590,909.6
LIABILITIES, according to statement of undertaking
On-lent funding
1
532,014.6
Funding not on-lent
2
58,895.1
Total funding 590,909.7
Derivatives, linked to on-lent funding
1
4.4
Other liabilities
2
10,181.6
Total liabilities/undertaking 10,186.0
ASSETS, according to statement of undertaking
Lending
1
, see Note 15 544,428.3
Liquidity reserve
2
, see Notes 3, 14, 16 58,895.1
Derivatives, linked to on-lent funding
1
553.5
Other assets
2
40.1
Total assets 603,917.0
1) Basis of allocation: Percentage equivalent to each member’s share of Kommuninvest’s total lending.
2) Basis of allocation: Percentage equivalent to each member’s participation in the total contribution
capital paid to the Kommun invest Cooperative Society.
LIQUIDITY RISK
Liquidity risk refers to the risk that it will not be possible to meet
payment obligations on maturity. Kommuninvest’s liquidity
risk management is pervaded by a highly restrictive attitude
towards liquidity risk, with the risk being limited by maintaining
a liquidity reserve of highly liquid assets. The liquidity risk is
further limited by the Company being a full member of the
Riksbank’s (Swedish central bank) RIX payment system, through
which the Company can, among other things, raise loans
against collateral.
The Company also manages structural liquidity risk, which is
the risk that the Company has not financed its commitments
in advance. This risk is restricted, in part, through access to
liquid funding markets and, in part, through good matching of
maturities between assets and liabilities.
The Company’s principal assignment is to ensure access to
stable and efficient funding for the local government sector.
The greatest risk of the Company not being able to fulfil its
assignment lies in the Company not having access to sufficient
liquidity to cover local government sector needs. The Company
addresses this primarily through access to liquid funding
markets.
NOTE 3 CONT.
KOMMUNINVEST ANNUAL REPORT 2024 63
FINANCIAL STATEMENTS | NOTES
Liquid funding markets
To ensure that funding activities provide the necessary
conditions to cover lending and funding maturities, even
under aggravated market conditions, the Company has
access to liquid funding markets with broad investor bases.
The Company’s strategic funding markets are the Swedish
Benchmark Programme and benchmark borrowing in USD and
EUR within the EMTN programme (Euro Medium Term Note).
Short-term funding in the form of commercial papers are made
within the ECP programme (Euro-Commercial Paper). The
Company maintains a continuous market presence in these
programmes. The Company has previously been active in the
Japanese Uridashi market but chose to leave that market in
November 2021. In its strategic funding markets, the Company
issues Green Bonds on an ongoing basis.
Good matching between assets and liabilities
When assets and liabilities have different maturities, liquidity
risks arise. To minimise this risk, the Company strives to achieve
good matching between assets (lending and investments)
and liabilities (funding and equity). Assets and liabilities with
maturities of more than one year are to be matched. The graph
below illustrates the balance sheet maturity profile, indicating
good matching between assets and liabilities. The average
maturity of the Company’s outstanding funding amounted to
2.2 (2.3) years at the end of the year, if the earliest possible
cancellation date is used in the calculation. In connection
with cancellable funding, the investor has the right, under
certain conditions, to request premature repayment of loaned
NOTE 3 CONT.
funds. At year-end, the average maturity on the Company
assets amounted to 2.2 (2.2) years, with capital tied up in the
Company’s lending portfolio for an average 2.4 (2.4) years, and
with capital tied up in the liquidity reserve for 0.4 (0.4) years.
Maturity analysis
The maturity analysis below shows undiscounted cash flows,
including amortisation and interest payments, based on the
remaining agreed maturity dates. All flows are converted to
Swedish kronor by applying a spot rate.
TOTAL FUNDING BY TYPE OF INSTRUMENT
2024 (2023)
Sverige 80 (72) %
Tyskland 8 (17) %
Supranationals 6 (6) %
Finland 2 (3) %
Belgien 2 (0) %
Danmark 1 (1) %
Storbritannien 1 (1) %
Swedish Benchmark Programme
55 (57) %
Benchmark funding, other
currencies 26 (25) %
Green Bonds 14 (12) %
ECP, Euro-Commercial Paper
Programme 4 (4) %
Private placement 1 (1) %
Uridashi 0 (1) %
Swedish commercial paper
programme – (–) %
TOTAL FUNDING BY CURRENCY
2024 (2023)
Sverige 80 (72) %
Tyskland 8 (17) %
Supranationals 6 (6) %
Finland 2 (3) %
Belgien 2 (0) %
Danmark 1 (1) %
Storbritannien 1 (1) %
SEK 62 (66) %
USD 31 (31) %
EUR 6 (2) %
JPY 0 (1) %
AUD 0 (1) %
Other currencies 0 (0) %
MATURITY PROFILE, BALANCE SHEET
31 Dec 2024
SEK, bn
MATURITY PROFILE, BALANCE SHEET
31 Dec 2023
SEK, bn
Liabilities + Equity
Assets
Liabilities + Equity
Assets
KOMMUNINVEST ANNUAL REPORT 2024 64
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
Contractual, non-discounted cash flows
2024
On
demand 0–3 months
3 months–
1 year 1–5 years > 5 years
No
maturity Total
Recognised
value
Assets
Cash and balances with central bank 6,575.8 - - - - - 6,575.8 6,575.8
Sovereign bonds eligible as collateral - 31,149.2 3,473.4 - - - 34,622.6 34,541.6
Lending to credit institutions - 712.6 - - - - 712.6 712.6
Bonds and other interest-bearing securities - 1,645.2 5,826.2 10,321.9 - - 17,793.3 17,065.1
Lending - 43,168.9 119,568.0 375,662.7 41,957.5 - 580,357.1 544,428.3
Derivatives - 4,210.6 8,244.1 10,924.2 663.6 - 24,042.5 9,951.5
Other assets - 40.1 - - - - 40.1 40.1
Total assets 6,575.8 80,926.6 137,111.7 396,908.8 42,621.1 - 664,144.0 613,315.0
Liabilities
Liabilities to credit institutions - 2,433.9 - - - - 2,433.9 2,433.9
Securities issued - 38,231.7 141,209.0 422,216.7 25,326.8 - 626,984.2 588,475.7
Derivatives - 1,935.9 2,474.7 5,133.5 84.4 - 9,628.5 307.0
Other liabilities - 10,181.7 - - - - 10,181.7 10,181.7
Subordinated liabilities - - - - - - -
Equity - - - - - 11,916.7 11,916.7 11,916.7
Total liabilities and equity - 52,783.2 143,683.7 427,350.2 25,411.2 11,916.7 661,145.0 613,315.0
Total difference 6,575.8 28,143.5 -6,572.0 -30,441.4 17,209.9 -11,916.7 2,999.1 0.0
Committed undisbursed loans - - - - - - -
Committed, undisbursed loans
1
0.0 -184.5 -33.0 141.5 101.4 - 25.4 -
1) Negative amounts refer to outflows and positive amounts to inflows.
Contractual, non-discounted cash flows
2023
On
demand 0–3 months
3 months–
1 year 1–5 years > 5 years
No
maturity Total
Recognised
value
Assets
Cash and balances with central bank 4,722.7 - - - - - 4,722.7 4,722.7
Sovereign bonds eligible as collateral - 28,512.6 2,485.2 591.0 - - 31,588.8 31,481.4
Lending to credit institutions - 401.9 - - - - 401.9 401.9
Bonds and other interest-bearing
securities - 1,222.5 2,213.8 7,150.0 - - 10,586.3 9,916.4
Lending - 55,231.7 100,082.8 341,252.1 47,964.4 - 544,531.0 508,802.2
Derivatives - 2,854.6 8,240.7 10,116.2 779.9 - 21,991.4 7,822.8
Other assets - 5,763.7 - - - - 5,763.7 5,763.7
Total assets 4,722.7 93,987.0 113,022.5 359,109.3 48,744.3 0.0 619,585.8 568,911.1
Liabilities
Liabilities to credit institutions - 821.1 - - - - 821.1 821.1
Securities issued - 34,816.0 129,586.0 372,404.3 45,622.8 - 582,429.1 543,532.3
Derivatives - 4,194.8 6,150.0 11,081.1 126.4 - 21,552.3 5,961.3
Other liabilities - 7,540.9 - - - - 7,540.9 7,540.9
Subordinated liabilities - - - - - - 0.0 0.0
Equity - - - - - 11,055.5 11,055.5 11,055.5
Total liabilities and equity - 47,372.8 135,736.0 383,485.4 45,749.2 11,055.5 623,398.9 568,911.1
Total difference 4,722.7 46,614.2 -22,713.5 -24,376.1 2,995.1 -11,055.5 -3,813.1 0.0
Committed undisbursed loans - - - - - - 0.0 -
Committed, undisbursed loans
1
- -373.3 -89.5 240.9 283.1 - 61.2 -
1) Negative amounts refer to outflows and positive amounts to inflows.
KOMMUNINVEST ANNUAL REPORT 2024 65
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
Liquidity reserve
To ensure good payment contingencies even during periods
of stress (e.g. aggravating financing opportunities in the
capital markets), the Company maintains a liquidity reserve.
The liquidity reserve is defined as the Company’s holdings
in securities, investment repos and bank balances. Bank
balances refer to investments lacking underlying securities.
The Company’s own direct holdings of securities and securities
pledged as collateral are excluded from the reserve. The scale
of the liquidity reserve is governed by the principle that a
sufficient volume shall be maintained to meet the Company’s
liquidity needs even during periods of substantial unease in the
financial markets. The Company’s liquidity reserve shall also
comprise assets of good credit quality that are easily traded or
redeemed. Investments may only be made in liquid interest-
bearing securities and bank balances with senior status in the
event of insolvency. Investment may include implicit or explicit
zero interest rate flooring but no other structures.
Liquidity measure
The liquidity coverage ratio (LCR) measures the ratio of highly
liquid assets to net cash outflows over a 30–day period, in a
stressed situation. Accordingly, an LCR of 100 percent ensures
that the Company’s liquidity reserve comprises sufficiently
liquid assets to be able to meet net cash outflows over the
ensuing 30 days in a stressed scenario. Kommuninvest
measures and monitors LCR on a daily basis. in part, on an
overall level and, in part, for significant currencies, that is, within
each currency where the Company has funding amounting to
5 percent or more of total funding. The Company’s significant
currencies are SEK, USD and EUR. According to the risk
appetite, the LCR quota may not be lower than 110 percent. This
requirement includes all currencies combined, and individually
for EUR and USD, given that each currency is a significant
currency. For SEK, the Board of Directors has set a risk appetite
of 85 percent. The high proportion of sovereign bonds and
other cash and cash equivalents in the Company’s liquidity
reserve mean that the liquidity ratio exceeds the government’s
requirements by a good margin. in accordance with the CRR
regulations, the Company’s LCR, as of 31 December 2024, was
470.2 (5,252.4) percent and 211.8 (2,410.8) percent in USD and
684.3 (1,155) percent in SEK and 195.0 (-) percent in EUR (see
the table on the next page). For measures of structural liquidity
risk, the Company measures and monitors the net stable
funding ratio (NSFR), that is, the relationship between available
stable financing and the Company’s need for stable financing.
The Company has a risk appetite requiring that the NSFR not
fall below 110 percent. At year-end, the NSFR was 137.3 (140.1)
percent.
2024 2023
Liquidity Coverage Ratio (LCR) in accordance with the CRR
regulations Total USD SEK EUR Total USD SEK EUR
Extremely highly liquid assets (Level 1), excluding covered bonds 56,287.3 906.7 41,244.3 437.5 43,835.5 881.9 31,988.8 268.1
Extremely highly liquid covered bonds (Level 1) - - - - - - - -
Highly liquid assets (Level 2) - - - - - - - -
Liquidity buffer, SEK, million 56,287.3 906.7 41,244.3 437.5 43,835.5 881.9 31,988.8 268.1
Cash outflows, SEK, million 17,211.4 69.0 5,767.1 108.1 -29,762.3 -1,665.4 -14,632.1 -137.6
Cash inflows, SEK, million 5,241.7 363.5 4,056.3 70.2 9,513.4 1,966.9 9,957.7 0.1
Net cash outflow, SEK, million 11,969.7 17.3 1,710.8 37.9 -20,249.0 -416.4 -4,674.4 -137.5
Liquidity coverage ratio (%) 470.2 5,252.4 2,410.8 1,155.0 216.5 211.8 684.3 195.0
Liquidity
Coverage Ratio (LCR)
1
2024 2023
Total high-quality liquid assets (HQLA) (weighted
value) 79,574.1 76,881.2
Cash outflows – total weighted values 36,448.3 38,959.2
Cash inflows – total weighted values 12,600.9 12,404.4
Net cash outflows (adjusted value) 23,847.4 26,554.9
Liquidity coverage ratio, % 434.9 302.8
1) Refers to average figures for the year
Net Stable
Funding Ratio (NSFR) 2024 2023
Total available stable financing 460,206.5 442,613.9
Total need for stable financing 335,109.4 316,006.6
NSFR, % 137.3 140.1
KOMMUNINVEST ANNUAL REPORT 2024 66
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
CREDIT AND MARKET
Credit risk
Credit risk refers to the risk of a loss being incurred as a
consequence of a counterparty’s incapacity to meet its
obligations on time. Credit risk arises in various ways in the
Company’s operations and is divided into three areas: credit
risk arising in the lending operations, investment risk arising
in the Company’s liquidity reserve, as well as credit risk on
The Company’s credit risk exposures are presented in the table below.
Credit risk exposure 2024 2023
Recognised
gross
value
Expected
credit losses
Recognised
value
1
Risk-
weighted
exposure
value
Capital-
requirement
Recognised
gross
value
Expected
credit losses
Recognised
value
1
Risk-
weighted
exposure
value
Capital
requirement
Credit provision
Lending to municipalities and
municipal companies
2
544,431.7 -3.4 544,428.3 - - 508,806.0 -3.9 508,802.2 - -
– Risk category 1 362,606.9 -2.1 362,604.7 - - 339,858.0 -2.5 339,855.6 - -
– Risk category 2 155,741.9 -1.1 155,740.8 - - 144,406.0 -1.2 144,404.8 - -
– Risk category 3 22,039.3 –0.2 22,039.2 - - 20,583.7 –0.2 20,583.5 - -
– Risk category 4 4,043.6 0.0 4,043.6 - - 3,958.3 0.0 3,958.3 - -
Investments
Sovereign bonds eligible as collateral 34,541.8 -0.3 34,541.6 - - 31,481.6 –0.2 31,481.4 - -
– AAA 32,828.2 -0.3 32,827.9 - - 30,439.6 –0.2 30,439.4 - -
– AA 1,713.7 0.0 1,713.7 - - 1,042.0 0.0 1,042.0 - -
Cash and balances with central banks 6,575.8 0.0 6,575.8 - - 4,722.8 0.0 4,722.7 - -
– AAA 6,575.8 0.0 6,575.8 - - 4,722.8 0.0 4,722.7 - -
Bonds and other interest-
bearing securities 17,065.7 –0.5 17,065.1 - - 9,916.7 –0.4 9,916.4 - -
– AAA 13,780.4 -0.3 13,780.0 - - 8,065.1 –0.2 8,064.9 - -
– AA 3,285.3 –0.2 3,285.1 - - 1,851.6 –0.2 1,851.5 - -
Lending to credit institutions 712.8 –0.2 712.6 142.5 11.4 402.0 -0.1 401.9 80.3 6.4
– AAA 0.0 0.0 - - - 1.0 0.0 1.0 - -
– AA 38.1 0.0 38.1 7.6 0.6 101.0 0.0 100.9 20.3 1.6
– A 674.7 –0.2 674.5 134.9 10.8 300.0 -0.1 300.0 60.0 4.8
Derivatives1
Derivatives 9,951.5 - 9,951.5 - - 7,822.8 - 7,822.8 - -
- AA 4,269.4 - 4,269.4 - - 3,274.1 - 3,274.1 - -
- A 5,682.1 - 5,682.1 - - 4,548.7 - 4,548.7 - -
- BBB - - - - -
Other assets
Other assets 40.1 - 40.1 105.3 8.4 5,763.7 - 5,763.7 97.1 7.8
Off-balance sheet items
Committed loans
2
0.0 - 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0
Committed, undisbursed loans
2
398.2 - 398.2 0.0 0.0 629.8 - 629.8 0.0 0.0
Total (including off-balance sheet
items) 613,717.6 -4.4 613,713.2 247.8 19.8 569,545.4 -4.6 569,540.9 177.4 14.2
1) The recognised value corresponds to the maximum credit risk exposure without taking collateral received or other forms of credit enhancement into account.
For information regarding collateral received, see section Counterparty risk.
2) Guaranteed by local government undertaking See also section Risk in credit provision.
counterparty risk, which arises when the Company uses
derivative instruments. The Board of Directors sets limits for the
Company’s total exposure. Further limits are determined by the
President and CEO and the Credit Committee. When assessing
repayment capacity, the Company takes creditworthiness into
account, including ownership relations, the focus, scale and
financial stability of the operations.
KOMMUNINVEST ANNUAL REPORT 2024 67
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
Expected credit losses (ECL)
Kommuninvest calculates expected credit losses in
accordance with IFRS 9. Decisions on the methods used in
these calculations are made by the Company’s Asset Liability
Committee (ALCO). The Finance and Risk Departments review
and implement ALCO’s decisions on a daily basis. Changes in
credit risk are monitored daily.
Credit risk exposure
Kommuninvest is exposed to credit risks through its lending
portfolio, through off-balance sheet items and through
investments. Kommuninvest’s lending portfolio comprises
lending to municipalities and regions (members of the Society),
as well as municipal companies and other public entities. All
lending not provided directly to a member requires a joint and
several guarantee from one or more members. Off-balance
sheet items consist of contracted new lending yet to be
disbursed. Investments comprise cash and cash equivalents
or holdings in sovereigns or state-related counterparties,
including federal states, local government authorities and credit
institutions similar to Kommuninvest.
Calculation of ECL
In calculating expected credit losses (ECL), the exposure at
default (EAD) is multiplied by the proportion indicating the loss
given default (LGD). This is then multiplied by the probability of
default (PD). ECL=PD*LGD*EAD. ECL is updated on a daily basis.
These three factors, as well as phase allocation, are followed
up on an ongoing basis. On a quarterly basis, an assessment
is made of the trend for the period, and of any need for model
adjustment.
Expected maturity in the ECL calculation
ECL shall be calculated for different periods, which vary
depending on the development of the counterparties’
creditworthiness. When a contract is initiated, it is in Phase
1. ECL is then calculated on the basis of default possibly
occurring within the ensuing 12 months. In the event that
an exposure be classified in Phase 2 due to a heightened
credit risk, the calculation is based instead on all cash flows
throughout the remaining maturity. In the event of default,
the exposure is transferred to Phase 3 and is then considered
impaired. Indicators are used to continuously monitor credit
risk trends in the Company’s lending. All credit exposures
are currently in Phase 1. For the investments, Kommuninvest
uses the regulatory exemption for low credit risk. This is
supported by the investment portfolio’s credit risk profile and
high credit quality. Kommuninvest defines low credit risk as
a credit rating from Moody’s of at least Baa3 and from S&P
Global Ratings of at least BBB–. Kommuninvest currently
only has exposures with very good credit quality, which, in
addition to cash and cash equivalents at payment banks,
comprise sovereign or government relations. In connection
with negative changes in credit ratings, qualitative assessments
are often made to determine whether credit risk has increased
significantly. Assuming that no significant increase is deemed
to have occurred and the credit rating meets the Company’s
requirement of low credit risk, the asset remains in Phase 1.
Definition of default
Kommuninvest’s definition of default is in line with the
guidelines developed by the European Banking Authority (EBA)
and entail a counterparty having defaulted when at least one of
the following situations has occurred:
• Kommuninvest considers it unlikely that the counterparty will
be able to meet its commitments in full.
• Any of the counterparty’s commitments to Kommuninvest
have been due for payment for more than 90 days.
Before an exposure is considered to be in default,
Kommuninvest is to perform an expert assessment. Based on
the EBA’s guidelines, this shall ascertain whether a “technical
default” situation has arisen. If the exposure is directly to a
member (municipality or region), the in-depth analysis is
motivated primarily by the local government authorities’
constitutionally protected role in society, including the right
to levy taxes, meaning in practice that a local government
authority cannot be declared bankrupt.
Determination of impaired credit quality
Kommuninvest applies a set of indicators to continuously
monitor the development of credit risk in the lending portfolio.
The function of the indicators is to demonstrate whether there
is a change in the probability of default necessitating a transfer
between credit risk phases based on limits. Kommuninvest
applies both quantitative and qualitative indicators in the
ongoing follow-up of the lending portfolio. The quantitative
indicators comprise ratings from a rating agency and data
from a credit reporting agency, as well as performance
measurements for assessing lending counterparties. Limits
have been established for the quantitative indicators, and
violations are followed up. A limit is also applied, meaning that
an asset will be transferred to Phase 2 if payment is delayed
by more than 30 days. The qualitative indicators consist of
restructuring of loan terms. Before an individual counterparty is
transferred to phase 2, a special assessment is to be made to
elucidate the underlying causes and the counterparty’s overall
repayment capacity. The credit quality of the financial assets
is determined by the ALCO. Kommuninvest has never suffered
any actual credit loss, nor has it modified payment flows or
renegotiated any existing agreements. In light of the above, the
Company has no specific principles for write-offs.
Probability of default (PD)
The Company uses S&P Global Ratings’ database for historical
probability of bankruptcy and applies an internal theoretical
model to obtain forward-looking data. In the calculation of
expected credit losses in investments, PD is allocated based
on the issuer’s rating. In calculating ECL in the lending portfolio,
PD is allocated on the basis of an interpolation between PD
for the Swedish central government and PD for a level worse
than the lowest rating for a local government exposure in the
KOMMUNINVEST ANNUAL REPORT 2024 68
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
portfolio. This is because not all local government authorities
have credit ratings. For the interpolation of the lending
counterparty’s rating, Kommuninvest’s internal risk value model
is used. For the lending portfolio, Kommuninvest determines
PD at the counterparty level and not at the transaction level.
This is motivated by the fact that the conditions for all lending
are identical. with no hierarchical order of credit having been
assigned to counterparties. In other words, a deteriorated credit
quality will affect all of the counterparty’s transactions.
Factors affecting the calculation of PD:
• The weightings for macroeconomic factors are based on the
empirical correlations between macro factors and Z-factors.
Z-factors are used to adjust historical probability to become
forward-looking.
• For each segment, a specific long-term probability of
bankruptcy is applied, in which the categories “Non-financial
corporations” and “sovereigns” are used for the lending
portfolio and “Financial corporations” for investments.
• Z benchmark intervals are calibrated dynamically and
individually for each segment.
WEIGHTINGS, MACROECONOMIC FACTORS
Lending Liquidity reserve
2024 2023 2024 2023
GDP forecast 21% 21% 19% 22%
Unemployment 37% 33% 11% 11%
Stock market 13% 17% 34% 27%
Energy index 5% 5% 9% 8%
Non-energy index 5% 5% 7% 7%
Credit rating 19% 19% 20% 25%
HISTORICAL PROBABILITY OF DEFAULT
Non-financial
companies and sovereigns
Financial
companies
S&P Rating 2024 2023 2024 2023
AAA 0.00093% 0.00100% 0.00839% 0.00825%
AA+ 0.00166% 0.00180% 0.01256% 0.01235%
AA 0.00299% 0.00322% 0.01881% 0.01850%
AA- 0.00538% 0.00576% 0.02818% 0.02772%
A+ 0.00967% 0.01030% 0.04221% 0.04151%
A 0.01738% 0.01844% 0.06322% 0.06217%
A- 0.03123% 0.03301% 0.09467% 0.09310%
BBB+ 0.05614% 0.05908% 0.14175% 0.13940%
BBB 0.10089% 0.10571% 0.21219% 0.20867%
BBB– 0.18123% 0.18909% 0.31752% 0.31225%
BB+ 0.32536% 0.33798% 0.47489% 0.46701%
BB 0.58342% 0.60342% 0.70971% 0.69794%
BB– 1.04405% 1.07508% 1.05940% 1.04186%
B+ 1.86152% 1.90833% 1.57865% 1.55262%
B 3.29775% 3.36542% 2.34637% 2.30792%
B– 5.77684% 5.86851% 3.47426% 3.41789%
CCC-C 26.26877% 26.34287% 10.79318% 10.63046%
The PD used to calculate expected credit losses is a weighted
average of three different macro scenarios (normal, medium-
low and medium-high economic situations).
SCENARIO WEIGHTS
Scenario 2024 2023 Change %
Positive scenario 15% 10% 5%
Base scenario 70% 70% 0%
Negative scenario 15% 20% -5%
The data on which historical default figures are based have
been collected from S&P Global Ratings and then calibrated
for each individual scenario. The scenario involving a normal
economic situation is based on observed values for the
macroeconomic factors included in the model, while the
scenario involving a medium-low economic situation is
based on a historically low percentile for the values for the
macroeconomic factors and vice versa for the scenario
involving a medium-high economic situation.
Loss given default (LGD)
Lending
Swedish municipalities cannot be declared bankrupt and the
assessment is also that there is a high degree of covariation
between Swedish local government authorities and the
Swedish central government in times of crisis. The tax base
for both is also the Swedish economy. Accordingly, there
is a strong connection between the LGD for Swedish local
government authorities and the Swedish central government.
A standard value is applied for Swedish municipalities, based
on an expert assessment building on S&P Global Ratings
Aggregated European Recovery Data. The result of the
assessment is to apply an LGD of 35 percent.
Investments
Kommuninvest’s counterparties all have high credit ratings
and a stable financial position. Historically, no Kommuninvest
counterparty has suspended payments. Consequently, no
empirical history for LGD exists. To assess LGD, standard
values are used instead. For sovereigns and sovereign
counterparties, an expert assessment is conducted based on
S&P Global Ratings Aggregated European Recovery Data. The
result of the assessment is to apply an LGD of 35 percent. For
other counterparties, LGD is applied in accordance with the
CRR regulations. Under Article 161, senior exposures (non-
subordinated exposures) to unsecured financial institutions
must be allocated an LGD of 45 percent. For covered bonds,
LGD is also applied to in accordance with the regulations in
CRR. Under Article 161, covered bonds that meet the terms
of Article 129 are to be allocated an LGD of 11.25 percent.
Covered bonds include surplus collateral. In the event that the
regulations are amended or the reports from S&P are updated,
LGD may be adjusted.
Exposure at default (EAD)
For EAD, the nominal amount of the assets and outstanding
contractual cash flows are discounted by applying the effective
interest rate. Which cash flows are included in the calculation
KOMMUNINVEST ANNUAL REPORT 2024 69
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
depend on the outcome of the phase allocation. As the
exemption for low credit risk is applied to investments, only
cash flows with a one-year horizon are included in these assets.
The Company has no collateral for its credit risk exposure.
The effective interest rate comprises swap rates, the spread
for the Company’s outstanding issues and lending, and the
spread between the Company’s funding expenses, as well as
the various types of issuers included in the investments. Swap
rates and spreads for the Company’s issues are obtained from
the secondary market, while spreads for the Company’s lending
are obtained from the current customer price list. The spread
between the Company’s funding expenses and the various
types of issuers is determined through expert assessment.
By combining these components, a discount curve for each
currency and maturity is derived.
Sensitivity analyses
Since all exposures are in Phase 1, only one year’s PD affects
the Company’s expected credit losses. A sensitivity analysis
is conducted with a one-year horizon in the main scenario.
The sensitivity analysis for the macroeconomic factors can be
found in the table below. The tables show how ECL is affected
by the macroeconomic factors, given the Company’s scenario
weighting.
Sensitivity analysis, macroeconomic factors, lending, (change,
from, to) ECL, SEK million
GDP forecast (-1% 1.2% 0.2%) -0.92
Prev. unemployment (+10% +8.5% +9.35%) -1.62
OMX (-10% 2.53% -12.53%) -1.16
Energy index (-10% -6.25% -16.25%) -0.11
Non-energy index (-10% -3.05% -13.05%) -0.30
Prev. credit rating, govt.-owned comps. (-10% 44.65% 54.65%) -0.39
Prev. credit rating, financial. (+10% 173.32% 183.32%) -
Sensitivity analysis, macroeconomic factors, investments,
(change, from, to) ECL, SEK million
GDP forecast (-1% 1.2% 0.2%) -0.13
Prev. unemployment (+10% +8.5% +9.35%) -0.16
S&P (-10% 5.25% -4.75%) -0.65
Energy index (-10% -6.25% -16.25%) -0.04
Non-energy index (-10% -3.05% -13.05%) -0.07
Prev. credit rating, govt.-owned comps. (-10% 44.65% 54.65%) -
Prev. credit rating, financial. (+10% 173.32% 183.32%) -
Sensitivity to change in scenario weighting shown in table
below.
Sensitivity analysis scenario weights Effect, SEK million
More positive (P30 B70 N0) 1.02
More negative (P0 B70 N30) -1.34
End of preceding year (P10, B70, N20) -0.41
P stands for “positive”, B stands for “base” and N stands for
“negative.”
Changes during the year
Changes in ECL during the period
The Company’s ECL decreased by SEK 0.2 million overall, from
SEK 4.6 million to SEK 4.4 million. At the end of the preceding
year, the Company’s weighting was P10, B70 and N20. Had
these weights been applied, the Company’s ECL would have
decreased by SEK 4.8 million.
In other regards, the Company has not made any expert
adjustments based on current circumstances with high
geopolitical uncertainty and a steep cost curve. The same
model has been applied throughout 2024. Changes in PD and
LGD are shown in the table below. For changes in EAD, see
table Change in provisions for credit losses on the next page.
Forward-looking PD
Non-financial
companies and sovereigns
Financial
companies
S&P Rating 2024 2023 2024 2023
AAA 0.00200% 0.00240% 0.01105% 0.01680%
AA+ 0.00346% 0.00410% 0.01635% 0.02441%
AA 0.00598% 0.00703% 0.02421% 0.03546%
AA- 0.01034% 0.01204% 0.03583% 0.05151%
A+ 0.01788% 0.02062% 0.05303% 0.07482%
A 0.03091% 0.03532% 0.07848% 0.10866%
PD factor
Change contribution,
%
Scenario weights 58.9%
Macro weights -58.7%
GDP forecast 0.0%
Unemployment 160.6%
Share index -92.2%
Energy index -8.4%
Non-energy index 0.0%
Prev. Credit rating 0.0%
Historic probability of default 39.8%
Total 100.0%
Changes in PD factor reduced ECL by SEK 0.9 million, see the
division into risk variables and change of model in the section
Change in provisions for credit losses on the next page.
Underlying assumptions regarding LGD were not amended for
the period.
KOMMUNINVEST ANNUAL REPORT 2024 70
FINANCIAL STATEMENTS | NOTES
NOTE 3 CONT.
Change in provisions for credit losses
2024
Opening
balance
Initiated during
the period
Maturing
during the
period
Changed risk
variables
Change
of model
Closing
balance
Cash and balances with central banks -0.0 -0.0 0.0 - - -0.0
Sovereign bonds eligible as collateral -0.3 -11.5 11.6 -0.1 - -0.3
Lending to credit institutions -0.1 - - -0.1 - -0.2
Lending -3.8 –0.2 0.6 -0.0 - -3.4
Bonds and other interest-bearing securities –0.4 –0.4 0.0 0.3 - -0.5
Provisions for off-balance sheet items 0.0 0.2 –0.2 0.0 - 0.0
Total -4.6 -11.9 12.0 0.1 - -4.4
Change in provisions for credit losses
2023
Opening
balance
Initiated during
the period
Maturing
during the
period
Changed risk
variables
Change
of model
Closing
balance
Cash and balances with central banks –0.4 -0.0 0.4 - - -0.0
Sovereign bonds eligible as collateral –0.5 -27.8 32.2 -4.2 - -0.3
Lending to credit institutions –0.7 - - 0.6 - -0.1
Lending -5.7 –0.5 1.1 1.3 - -3.8
Bonds and other interest-bearing securities -0.1 –3.1 0.1 2.7 - -0.4
Provisions for off-balance sheet items -0.0 –0.4 0.5 -0.1 - -0.0
Total -7.4 -31.8 34.3 0.3 - -4.6
Changes in gross recognised value of provisions for credit losses
2024
Opening
balance
Initiated during the
period
Maturing during the
period
Closing
balance
Cash and balances with central banks 4,722.7 17,088.3 -15,235.2 6,575.8
Sovereign bonds eligible as collateral 31,481.4 2,000,536.9 -1,997,476.7 34,541.6
Lending to credit institutions 401.9 269,922.6 -269,611.9 712.6
Lending 508,802.2 247,654.5 -212,028.4 544,428.3
Bonds and other interest-bearing securities 9,916.4 16,669.1 -9,520.4 17,065.1
Off-balance sheet items 629.8 171,946.1 -172,177.7 398.2
Total 555,954.4 2,723,817.5 -2,676,050.3 603,721.6
Changes in gross recognised value of provisions for credit losses
2023
Opening
balance
Initiated during the
period
Maturing during the
period
Closing
balance
Cash and balances with central banks 26,217.2 4,722.7 -26,217.2 4,722.7
Sovereign bonds eligible as collateral 30,689.7 3,021,691.7 -3,020,900.0 31,481.4
Lending to credit institutions 1,763.4 12,381.6 -13,743.1 401.9
Lending 470,675.9 123,272.2 -85,145.9 508,802.2
Bonds and other interest-bearing securities 6,752.3 17,939.2 -14,775.1 9,916.4
Off-balance sheet items 549.2 162,200.6 -162,120.0 629.8
Total 536,647.7 3,342,208.0 -3,322,901.3 555,954.4
Credit risk in lending
Credit risk in lending refers to the risk that credit provision
counterparties fail to meet their commitments. This risk is
limited by lending only to members and approved companies,
foundations and associations in which one or more members
has a controlling influence. Approved companies, foundations
and associations are to be covered by guarantees from one
or more members. Members and approved companies,
foundations and associations are followed up continuously and
assessed from a holistic perspective at the corporation level.
To provide an overall view of a member’s financial situation,
a quantitative risk value analysis is performed. This assesses
the income statement, balance sheet, demographics and risks
in municipal operations. Based on this analysis, each of the
Society’s member municipalities and regions is allocated a
risk value between 0 and 13, where a lower value represents a
lower risk. The risk in the Company’s lending operations is very
low and the Company has never suffered any credit losses in its
lending operations.
KOMMUNINVEST ANNUAL REPORT 2024 71
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NOTE 3 CONT.
RISK VALUE MODEL
Number of municipalities
Risk value
2021
2022
2023
Capital requirements for credit risk
From the perspective of capital adequacy, the local
government sector has a risk weight of 0 percent, meaning that
when the Company uses the standardised method in the CRR
regulations, there is no statutory capital requirement for risk in
credit provision.
Investment risk
In addition to the losses justified by an individual
creditworthiness for the investment, there is also a risk of
further losses as a result of the risk of default co-varying for
several investments. The correlation in the risk of default can
be explained by factors such as industrial and geographical
affiliation. The risk is limited by the liquidity reserve being
invested in securities and bank balances with high credit
ratings. Investments are limited by a country limit, with the
exception of Sweden and supranational counterparties for
which there is no country limit. In addition, the Board of
Directors determines annually the maximum gross exposure to
individual issuers. At year-end, the average remaining maturity
of liquidity reserve investments was 4.7 (4.7) months. The
longest remaining maturity of an individual security was 28.0
(37.0) months. The tables below show the exposure by country,
rating and issuer category. The category “credit institution”
consists primarily of securities issued by so-called subsidised
lenders, which are treated as exposures to the national
government, according to the CRR regulations.
Investments by country 2024 2023
Sweden 37,639.7 33,480.5
Germany 6,861.7 7,690.1
Supranationals 9,734.7 2,929.3
Finland 1,162.4 1,387.2
Denmark 1,108.4 571.5
United Kingdom 674.5 299.9
Belgium 1,713.7 163.9
Total 58,895.1 46,522.4
Investments by rating 2024 2023
AAA 53,183.7 43,228.0
AA 5,036.9 2,994.4
A 674.5 299.9
Total 58,895.1 46,522.4
Investments by issuer category 2024 2023
National governments or central banks 41,117.4 36,205.1
Multilateral development banks 6,067.7 2,929.3
International organisations 3,667.1 -
Credit institute 8,042.9 7,388.0
– of which, subsidised lenders 7,330.3 6,987.1
– of which, investment repos - -
– of which, bank balances 712.6 400.9
Total 58,895.1 46,522.4
Capital requirements for investment risk
When calculating capital requirements for investment risk,
Kommuninvest uses the standard method in accordance with
the CRR regulations, where the exposure value is equivalent
to the recognised value. The risk-weighted exposure value
is calculated by the exposure being assigned a risk weight in
accordance with the regulations. The risk-weighted exposure
value is multiplied by 8 percent and, accordingly, the capital
requirement for investment risk amounts to SEK 11.4 (6.4)
million.
Capital requirement for concentration risk
Credit-related concentration risks are measured for three
concentrations: geographic concentration, industry-specific
concentration and name concentration Concentration risks
are estimated applying the Herfindahl index, meaning that
exposures are grouped and weighted in relation to their share
of the total exposure. A higher Herfindahl index means a greater
concentration.
Capital requirements for concentration risks are calculated,
applying formulas, as a proportion of the capital requirement for
credit risk under Pillar I. The calculations of capital requirements
for credit risk-related concentration risk implemented by
the Company are based on the method described in the
Swedish Financial Supervisory Authority’s (Finansinspektionen)
memorandum “FI’s Pillar II method for assessing increased
capital requirements for credit-related concentration risk”
(Sw: Pelare 2-metod för bedömning av kapitalpåslag för
kreditrelaterad koncentrationsrisk) from 29 December 2020.
Since the Company’s lending is covered by a guarantee from
one or more members, the assessment is made that no capital
requirement need be recognised for concentration risk in the
provision of credit. When the calculations were performed as
per 31 December 2024, the capital requirement under Pillar
2 for concentration ri